Starlink operator SpaceX is continuing its fight against state plans to expand fiber broadband availability. After saying the Trump administration should deny a Virginia proposal, SpaceX is taking the same approach in a fight against Louisiana.
SpaceX made its view known to the Louisiana Office of Broadband Development and Connectivity in a filing, which was reported yesterday by PCMag. SpaceX complained that Louisiana proposed awarding 91.5 percent of funds to fiber Internet service providers instead of to the Starlink satellite system. SpaceX alleged that Louisiana was influenced by "a legion of fiber lobbyists and other hangers-on seeking to personally benefit from massive taxpayer spending."
The Trump administration rewrote rules for the $42 billion Broadband Equity, Access, and Deployment (BEAD) grant program in a way that benefits Starlink. Instead of prioritizing fiber networks that offer better service and are more future-proof, the Trump administration ordered states to revise their plans with a "tech-neutral approach" and lower the average cost of serving each location.
SpaceX's letters to Virginia and Louisiana claim the states are violating the new rules with their funding proposals.
"The State of Louisiana's Equity, Access, and Deployment (BEAD) program Final Proposal proposes to spend nearly $500 million dollars [sic] to provide connectivity to its unserved and underserved locations," SpaceX wrote. "SpaceX applied to serve virtually all BEAD households for less than $100 million dollars. As such, Louisiana's proposal includes over $400 million dollars in wasteful and unnecessary taxpayer spending."
SpaceX unhappy with $7.75 million
Instead of selecting Starlink for all locations, Louisiana allocated the company $7.75 million to serve 10,327 locations. The plan would spend $499 million for 127,842 locations overall. The Louisiana Local Fiber Consortium, which includes two Louisiana providers that partnered with T-Mobile, was the biggest winner, with $378 million for 68,535 locations.
"Louisiana's results demonstrate that it did not observe statutory requirements or program rules and did not conduct a competitive process," SpaceX alleged. "A process in which Louisiana is required to award grants based on the lowest cost to the program, and awards 91.5% of funds to fiber projects at an average per-location cost of $4,449, while rejecting applications at $750 per location because the bid was based on Low-Earth Orbit (LEO) technology could not possibly be considered compliant, technology neutral or a 'competition.'"
SpaceX said it will ask the National Telecommunications and Information Administration (NTIA) to reject the Louisiana plan if the state doesn't change course. "NTIA simply cannot approve the Final Proposal as it stands if the 'Benefit of the Bargain' remains the goal. Louisiana must revise its final proposal to appropriately consider the applications received, or NTIA must reject its Final Proposal," SpaceX said.
A previous Louisiana proposal drafted during the Biden administration would have spent $748 million for broadband deployment and provided fiber to nearly 95 percent of 140,000 eligible locations. The new Louisiana proposal, written to comply with Trump administration rules, reduced projected spending by $250 million.
We contacted Louisiana's broadband office about SpaceX's letter and will update this article if it provides any comment.
State officials worry about satellite limits
As we noted in previous coverage, Starlink is already widely available and doesn't need to build infrastructure to each home like fiber and cable operators do. But states can direct grant money to Starlink in exchange for guaranteed service availability or deals on equipment.
While subsidizing fiber deployment is more expensive, fiber offers faster speeds and doesn't have the capacity problems inherent in satellite networks. As even SpaceX CEO Elon Musk acknowledged years ago, Starlink is best suited for "the hardest-to-serve customers that telcos otherwise have trouble" serving.
Louisiana's draft plan said its analysis of low-Earth orbit satellite and fixed wireless technology suggests those providers "will not be able to scale into the future due to a combination of limitations on available spectrum, the impact of tree canopy on service availability, high customer density and potential demand, [and] the impact of 5G and/or other wireless backhaul on residential end-user capacity."
Microsoft employees occupy headquarters in protest of Israel contracts