Musk’s SpaceX received BEAD awards valued at $733 million across various states, including $109 million from Texas.
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SpaceX, the aerospace service company owned by multi-billionaire Elon Musk, wants to change the terms of state government grants it already has received for rural and low-income broadband service.
SpaceX Founder and Owner Elon Musk
Regulators, however, are pushing back — with several media outlets reporting that federal officials now advise state grant offices not to budge on the change requests.
At issue are grants under the federal Broadband Equity Access and Development program, which is a Biden Administration initiative meant to deliver broadband services to underserved areas of the nation. Musk’s SpaceX received BEAD awards valued at $733 million across various states, including $109 million from Texas. Under those awards, SpaceX has promised to provide broadband service through its Starlink system of low-earth-orbit satellites.
However, according to media reports, SpaceX now calls for modifying certain metrics included in its BEAD grant awards. For instance, Space X wants states to count broadband serviceable locations as served even if a consumer subscribed and subsequently cancelled during the BEAD performance period. The company also wants a 50 percent upfront payment of its BEAD allotment, according to published reports. A copy of SpaceX’s letter to state offices can be found here.
FEDS PUSH BACK
In apparent response, the National Telecommunications and Information Administration has updated its BEAD guidance and now advises states that its rules are final and that internet providers cannot rewrite or alter their contracts or BEAD’s terms and conditions. As the federal administrator for the BEAD program, the NTIA oversees BEAD grant rules and approves state-level BEAD plans. The NTIA issued the new guidance in a recently updated FAQ page on its website.
“Federal law, regulations, and program rules will always govern in the event of a conflict with a BEAD sub-grant agreement term,” the NTIA guidance stated. “The BEAD sub-grant agreement may not redefine program terms, relieve either party of responsibilities established by program rules, or assign responsibilities to the potential subscriber that program rules already assigned to the Eligible Entity or BEAD sub-grantee.”
BEAD HISTORY
That SpaceX managed to successfully bid into the BEAD program at all was only made possible by changes ordered by the Trump administration. Originally, BEAD was part of the Biden Administration’s bipartisan infrastructure act, which included an allocation of $42 billion and had rules effectively preventing participation from low-earth-orbit systems. But the Trump administration cut BEAD outlays to $21 billion, and made rule changes allowing low-earth-orbit-satellite service.