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SpaceX is challenging another state's broadband expansion plan, arguing that it's pouring too much federal funding into fiber projects instead of cheaper satellite alternatives, like Starlink.
SpaceX sent a letter to Colorado’s broadband office after the state revealed how it would divvy up $400 million in US Broadband Equity, Access, and Deployment (BEAD) program funds, which will be used to close internet gaps.
"Colorado proposes awards covering 24% of its locations at average costs exceeding $10,000, over seven times the amount offered by SpaceX,” the company argues.
Colorado selected satellite providers to deliver broadband to half of the state's underserved locations. But most of that will go to Amazon’s Project Kuiper, which gets $25 million to deliver internet to 42,000+ locations. Starlink gets about $9 million for 5,400 locations.
(Credit: Colorado Broadband Office)The remaining 45,000 locations, or 48%, will receive fiber internet, which can supply gigabit speeds. (Amazon and SpaceX are still working on that.) However, the fiber installations are more costly, eating up a good portion of the $400 million in BEAD funds. That translates to about $10,000+ for each fiber location, $1,700 for Starlink, and $600 for Project Kuiper.
(Credit: SpaceX)SpaceX wants the Commerce Department’s National Telecommunications and Information Administration (NTIA) to intervene.
“NTIA should carefully review Colorado’s proposal, reject unnecessary spending, and require Colorado to recompete these locations to achieve the Benefit of the Bargain and bring internet to those who need it in months, not years,” SpaceX wrote.
In June, the Trump administration overhauled the BEAD program to prioritize “technology neutrality” to help lower costs and potentially shift more funding to satellite internet services. However, many states are still awarding most of their BEAD projects to fiber providers, prompting complaints from SpaceX. It's also asked NTIA to intervene in Virginia and Louisiana.
In its two-page letter to Colorado, SpaceX says the state “appears to have partially complied with the program’s rules to base grant awards primarily on cost.” But the company urged NTIA to scrutinize the remainder, citing the higher costs.
NTIA didn’t immediately respond to a request for comment, but the agency must approve each state’s BEAD proposal before the federal funding is distributed.
The deadline for states to submit BEAD funding proposals was Sept. 4, though they can request an extension. According to the Benton Institute for Broadband and Society, over 36 BEAD proposals from US states and territories have been finalized.