State Sen. Charles Schwertner: “I’ll just say it bluntly — favoritism and transparency are real big concerns that have been brought to my office.”
________________________________________________
The state office responsible for administering billions of dollars in broadband grants finds itself facing legislative criticism for alleged favoritism relating to Elon Musk’s Starlink company.
At a June 24 hearing of the Senate Business and Commerce Committee, lawmakers suggested that the state Broadband Development Office made changes to grant guidelines to favor “low earth orbit” satellite service over other technologies. The BDO’s top official also acknowledged during the hearing that Gov. Greg Abbott’s office requested a review of the relevant grant guidelines prior to the awards. In 2025 Musk’s SpaceX company received $108.8 million in grants to serve 64,000 Texas locations with Starlink.
Sen. Charles Schwertner
The Texas Broadband Development Office has responsibility for dispersing more than $5 billion in state and federal grants to deliver broadband service to unserved and underserved areas of Texas. According to published reports, Musk’s Starlink stands alone in offering large-scale LEO service in Texas, although Amazon also has sought similar broadband grants, according to published reports.
“I’ll just say it bluntly, favoritism and transparency are real big concerns that have been brought to my office,” committee chair state Sen. Charles Schwertner, R-Georgetown, said during the meeting. Lawmakers also raised questions about other aspects of the Broadband Development Office’s performance, including whether the office was awarding grants in areas that already had pre-existing service.
The hearing became particularly fraught after Sen. Schwertner began questioning Broadband Development Office director Bryant Clayton about changes his department made in how it disburses grant money to companies offering low earth orbit, or LEO, service.
Schwertner said that under changes approved by the BDO, that office increased how much it provides “up front” to LEO companies. At the same time, requests for changes from companies using more traditional technologies had been rejected. “[There were] other grant applicants that were not LEOs that came forward and said, ‘Hey, we want our [application process] to be reconsidered, too. We want the sweetheart deal that was given to the LEOs.’ And y’all chose not to reconsider those applicants, did you?’” Schwertner said.
Clayton failed to explain why those companies’ requests were rejected. However, under questioning from state Sen. Nathan Johnson, D-Dallas, the BDO director acknowledged that Gov. Abbott’s office had expressed concerns about how the BDO distributes LEO grants. He said that “the office of the governor asked us to look at how our proposed structure compared to other states,” and that the concern was “generally that we were out of step with other nearby states.”
Musk Company Lobbying
Drew Garner, an officer with the Benton Institute for Broadband & Society, said Musk’s companies have been lobbying to change rules nationwide around the awarding of broadband grants. Speaking with Texas Public Radio, Garner explained that “states would prefer to give them a small amount of money up front and then distribute the rest of the money sort of in increments based on the adoption of internet service.” However, “this is not something Starlink likes and so they have been pushing back on states that try to implement this reimbursement process,” he said.
In response to questions from Texas Public Radio, Abbott’s press secretary Andrew Mahaleris wrote that “Governor Abbott supports getting high-speed internet to rural Texans as quickly and cost-effectively as possible. Low Earth Orbit satellite service is essential for the most remote areas where traditional fiber is too expensive and slow to build.’
Mahaleris also noted that “the Broadband Development Office in the Office of the Comptroller made the decision to adjust the grant disbursement schedule to better align with other states and allow providers to access capital earlier, helping deliver service to rural communities faster.”
Part of a national shake up in grant funding for broadband
Last year the Trump administration amended rules for the administration of the federal Broadband Equity, Access and Deployment, or BEAD, program. Previous rules under the $42 billion program favored grants for traditional fiber-based high-speed internet, while the new rules called upon states to award grants on a “technology neutral” basis. This change made it easier for LEO companies like Starlink to receive grant awards.
“I’m concerned about wasting taxpayer money,” said state Sen. Johnson, who is running for state attorney general. “It is relevant that at the time period in question, a guy named Elon Musk who owns SpaceX, that owns Starlink, has tremendous control over the federal government.”
Sen. Schwertner also has sent a letter to the BDO’s Clayton calling upon him to respond to concerns raised in the hearing, according to reporting by Texas Public Radio. In the letter, Schwertner called for the BDO to “increase transparency and accountability” and “enhance the efficiency.”
The Broadband Development Office must provide an update on how it plans to make those changes by Aug. 1 and have a new strategic plan by the end of the year, according to the letter.
— Jack Klug