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Democratic lawmakers are urging the US government to consider revoking millions in broadband grant funding for SpaceX’s Starlink over fears it’ll fail to meet its service obligations.
As Politico first reported, 21 members of the House, led by California Rep. Sam Liccardo, sent a letter to the National Telecommunications and Information Administration (NTIA) that accuses SpaceX of trying to “pressure state broadband offices to relax the requirements" for the Broadband Equity, Access, and Deployment (BEAD) program.
Starlink is poised to receive $700 million from the BEAD program, which is preparing to distribute $21 billion in subsidies to all 50 states and US territories. But in January, SpaceX took the unusual step of sending a letter and an attached contract rider to state broadband offices, subtly suggesting it might ditch the program unless certain rules were loosened.
NTIA pushed back on SpaceX’s demand in February, noting that BEAD participants “may not redefine program terms.” Even so, the request didn't sit well with Democratic lawmakers.
“This weakening of standards will undermine the service and performance of broadband promised to hundreds of thousands of underserved American families, and call into serious question the company's ability to act as a responsible steward of American taxpayer dollars,” they wrote to NTIA Administrator Arielle Roth.
(Credit: SpaceX)The lawmakers argue that the contract rider “casts doubt on SpaceX’s willingness or ability to meet its BEAD obligations." Flagged issues include the company demanding 50% of the funds up-front, and controlling how states measure whether Starlink has been complying with BEAD requirements.
“By retaining the sole right to determine which subscribers are excluded from testing (based on ‘obstructions’ or ‘malfunctioning CPE’ [customer premise equipment]), Starlink can effectively invalidate data from underperforming BSLs [broadband service locations],” the letter says. “This provision will whitewash Starlink’s performance compliance by removing the hardest-to-serve households from the dataset.
“If Starlink cannot comply with the standards that other BEAD providers have accepted, NTIA and state broadband offices must reconsider these awards,” the letter adds. "We cannot allow hundreds of thousands of underserved families to receive substandard and unaffordable service because a provider seeks special treatment after the awarding of bids."
The Democrats estimate SpaceX is on track to receive "$733.5 million in 45 of the 56 states/territories" in return for using Starlink to service 472,604 locations.
The letter prompted fixed wireless equipment provider Tarana to slam SpaceX for allegedly trying to exempt itself from certain BEAD rules. “Even worse, Starlink is jeopardizing the digital future of hundreds of thousands of families,” the company wrote, alluding to the rider contract.
However, NTIA is indicating that they have nothing to worry about. “NTIA and Secretary Lutnick have been clear: all participants must comply with program rules—those requirements are not optional and cannot be contracted away,” the agency told PCMag. “We have seen no indication that State Broadband Offices view this differently. They have heard from us loud and clear, and we remain available should any further questions arise.”
SpaceX did not respond to a request for comment. In the meantime, NTIA has already cleared most US states' BEAD plans, paving the way for the funding to roll out widely. However, that came after the Trump administration revamped the BEAD program to much controversy, requiring states to consider satellite internet services, including Starlink and Amazon Leo, over faster, but costlier gigabit fiber.