SpaceX is protesting Virginia’s $613 million plan to expand high-speed internet access, accusing the state of deliberately denying a larger slice of the subsidies to Starlink.
On Wednesday, the company blasted Virginia’s plan as a “massive waste of federal taxpayer money” after the state chose Starlink for just 5,579 of the total 133,000 locations slated for subsidized broadband installations.
“Simply put, Virginia has put its heavy thumb on the scale in favor of expensive, slow-to-build fiber bias over speedy, low cost, and technology neutral competition,” the company told the state’s government in a 7-page letter shared with the media.
“Virginia must immediately revise its final proposal to appropriately consider applications received in line with program rules,” the letter adds.
(Photo by Silas Stein/picture alliance via Getty Images)
The dispute involves $42.5 billion to fund high-speed internet in underserved areas called the Broadband Equity Access and Deployment (BEAD) program. In June, the Trump administration overhauled the program to shift away from prioritizing fiber installations for “technology neutrality,” opening the door for satellite internet services and fixed wireless to receive more of the federal funding from each state’s BEAD program.
But despite the policy change, Virginia’s recently announced BEAD proposal relies mostly on fiber, rather than satellite, for the state’s underserved areas. Under the plan, Starlink will receive $3.2 million in funding or what amounts to about $584 per site —a sharp contrast from the more expensive, but faster fiber installations that can cost around $6,000 to $8,000 per site.
Wednesday’s letter from SpaceX reveals the company wanted “to serve virtually every BEAD-eligible household in Virginia with high-speed broadband for $60 million dollars, available to Virginians immediately.”
“Instead, Virginia proposes to spend $613 million dollars for connectivity that will be deployed at some point within the next four years, if ever, resulting in taxpayers overspending for connectivity in Virginia by ten times the necessary amount,” SpaceX added.
(www.dhcd.virginia.gov)
In the letter, SpaceX goes on to claim Virginia’s BEAD plan “failed to observe technology neutrality,” and argues Starlink could deliver the same results faster and “at one tenth of the cost.”
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“The Final Proposal makes clear that Virginia began with a pre-ordained result and then overlaid a paper-thin veneer of ‘analysis’ to unlawfully achieve its preferred outcome —maximum taxpayer spending benefiting specific companies and a misapplication of competitive rules,” the company added.
Virginia’s BEAD program didn’t immediately respond to a request for comment. But according to state documents, Virginia used factors such as “tree cover,” along with “speed, latency, and scalability” in contracting the ISPs for each BEAD location. That could’ve caused Virginia to favor more expensive fiber installations since they can supply gigabit internet speeds and function under heavy tree cover.
In contrast, Starlink can offer internet speeds from 100Mbps to over 300Mbps. Although each Starlink dish requires a view of the sky to receive the broadband, SpaceX recently introduced an upgrade to help the satellite internet perform better under trees.
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SpaceX’s letter goes as far to urge the Commerce Department’s National Telecommunications and Information Administration to deny Virginia’s final proposal unless revisions are made.
The Commerce Department didn’t immediately respond to a request for comment. But the agency will need to clear Virginia’s BEAD proposal before funding can be awarded.
(Brian Westover)
Although the dispute risks holding up Virginia’s BEAD program, SpaceX wrote in the company’s letter: “These efforts will not delay BEAD households from receiving much-needed connectivity but will accelerate the program by prioritizing lowest-cost awards to providers like SpaceX that are already deployed and are ready to enroll customers tomorrow, instead of waiting years for terrestrial deployments to materialize.”
SpaceX sent the letter after Louisiana’s government also awarded most of its BEAD funding to fiber providers over Starlink. The company didn’t respond to a request for comment about whether it’ll also challenge Louisiana’s BEAD proposal.
The protest occurs when others critics have denounced the Commerce Department for overhauling the BEAD program to potentially take funds away from faster fiber installations. The Benton Institute for Broadband and Society has also noted that under the BEAD program revisions, SpaceX is only required to provide a free Starlink dish for eligible locations and reserve internet capacity. In addition, the revised BEAD program has revoked a state’s ability to set the pricing for internet plans meant for low-income users.
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