Musk's Starlink to Benefit Under Trump Broadband Changes

Tribune News Service — A change by the Trump administration to the federal government's $43 billion plan to bring high-speed Internet to rural communities across the country stands to deliver a windfall for Texas billionaire Elon Musk.

Instead of laying fiber-optic cables that largely serve cities and suburbs, the federal government is turning to lower-cost satellite service provided by companies like Musk's Starlink and Amazon LEO.

Nationwide, Starlink is set to deliver service to more than 470,000 locations through the broadband program — more than any other provider — at a cost of $734 million, according to the non-profit Connected Nation. In Texas, roughly 27 percent of the more than 240,000 locations set to be connected through the rural broadband program will now be served by satellite networks, according to a revised state plan approved by the National Telecommunications and Information Administration last month.

The shift, which is expected to reduce costs to the federal government by close to $20 billion, is drawing concern that rural communities in Texas will be left behind in an increasingly digitized world, where everything from manufacturing to health care is reliant on high-speed Internet connections.

Scientists and industry experts question whether satellites can actually provide service equal to fiber optic cables, and point to congestion issues faced by existing Starlink users. A recent study by scientists at Carnegie Mellon University found Starlink failed to meet the minimum requirement for the rural broadband program 75 percent of the time.

"Did (Starlink) get the award because it's the least expensive solution or was it the best option based on the geography?" asked Kelty Garbee, executive director of the non-profit Texas Rural Funders. "Rural and urban communities both want the same thing, affordable, reliable high-speed Internet, and I want to make sure we don't end up with broadband haves and have nots."

Commerce Secretary Howard Lutnick has touted the revised Broadband Equity, Access, and Deployment program — known as BEAD — as more cost effective and likely to get broadband service to rural Americans more quickly than the plan set in place by the Biden administration, which favored fiber optic cable except in limited circumstances.

When the Trump administration announced last month that Texas had been approved for $1.2 billion in federal funding — down from $3.3 billion the state had originally expected to receive — the Texas Comptroller's Office said it would enable large swaths of the state to "connect to high-speed Internet for the first time in state history."

Starlink and Amazon, which won the majority of satellite contracts in Texas, did not respond to requests for comment.

In a letter to Virginia officials in August, Starlink claimed its broadband service met the program standard of 100 megabytes per second and "demonstrated these capabilities in the real world."

Ellis Scherer, a policy analyst at the Washington think tank Information Technology and Innovation Foundation who endorsed Trump's changes to the BEAD program, acknowledged that satellite broadband service is not yet at the same level as fiber optic. But he said the technology was likely to improve rapidly with more deployment and questioned whether rural communities needed the same level of broadband service as offered in cities.

"They're going to get the broadband they need," he said. "When you serve a 10-story building, that's very different than running it to three homes that are two miles apart."

The change has also set off a fight within the U.S. Senate, where U.S. Sen. Ted Cruz of Texas has pushed to scale back the BEAD program since Trump's election last November.

In a letter to the former Assistant Secretary of Commerce for Communications and Information at the NTIA — a position Cruz's former policy director Ariel Roth now holds — the senator described the program as laden with "central planning mandates" and "irrelevant requirements that tie up resources, create confusion and slow deployment."

Now he, along with Sen. Jodi Ernst, an Iowa Republican, are pushing legislation to return close to $20 billion in unspent BEAD money to the U.S. Treasury Department, despite objections from both sides of the aisle. Republicans in rural states, including U.S. Sens. Shelley Moore Capito of West Virginia and Roger Wicker of Mississippi, along with Louisiana Governor Mitch Landry, want to use the money for education and training programs designed to expand digital literacy.

"We can build these wires all we want, but we still got to get people online," said Drew Garner, of the non-profit Benton Institute for Broadband & Society. "The biggest cause of the digital divide is the fact that people can't afford service and they can't effectively use it. That's the main reason people aren't online."

The Texas Comptroller's Office did not return a request for comment about whether it supported the return of unused funds to the federal government.

The impact of high-speed Internet goes far beyond faster download speeds and the ability to stream movies and shows across multiple devices at once.

In the region surrounding Alpine and Fort Davis in West Texas, the installation of high-speed fiber optic cable over recent years has attracted a myriad of new industry including data centers and manufacturing, said Rusty Moore, general manager of Big Bend Telecom, which covers a close to 18,000 square mile area.

Big Bend Telecom had bid to expand that existing fiber optic network through the BEAD program but lost out to Starlink, with satellite companies winning virtually every broadband contract west of Midland.

"Satellites have their purpose but for businesses to invest they want to build in a place where there's fiber optic line," Moore said.

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