In a major win for internet providers like Starlink, the National Telecommunications and Information Administration on Monday released much-anticipated guidance for how states can use Broadband Equity, Access and Deployment funding on alternative technologies like low-Earth orbit satellites. While this news is far from set in stone, it could have major implications down the road for rural residents without any access to high-speed internet.
The $42.5 billion BEAD program is the federal government’s largest-ever investment in broadband, allowing each US state and territory to apply for funding to expand the infrastructure needed for high-speed internet. Any projects financed by BEAD must support the FCC’s 100Mbps download/20Mbps upload speed requirement, which was increased from a minimum of 25/3Mbps standard in March.
From the start, the NTIA has made it clear that expanding fiber infrastructure is the priority for states applying for BEAD money. While that’s still the case, states can now turn to “alternative technologies” in areas where no cable or fiber internet providers are operating.
“My gut reaction is that this is a pretty big gift to Starlink,” Christopher Ali, professor of telecommunications at Penn State University, told CNET. “But, of course, we have to remember that these are really only for the extreme high cost areas.”
When states receive bids from internet providers to expand infrastructure, they’ll still have to prioritize technologies like fiber, cable, licensed fixed wireless and DSL first.
“Fiber is a future-proof technology that will grow with families’ data needs over time. It is the gold standard,” BEAD program director Evan Feinman wrote in a blog post announcing the guidance. “But where fiber is not economically feasible, states and territories have other options.”
If fiber (and cable, DSL or licensed fixed wireless) providers don’t exist in an area — or if they’re too costly to deploy — states can consider unlicensed fixed wireless and low-Earth orbit satellite providers. This doesn’t include satellite providers like Hughesnet and Viasat, which use satellites farther from the Earth’s surface and don’t meet BEAD’s speed requirements.
Good news for Starlink, but it may have a speed problem
The NTIA’s announcement is great news for the one low-Earth orbit satellite provider currently operating in the US (Amazon’s Project Kuiper will reportedly begin offering service next year). Starlink is owned by SpaceX, which is owned by Elon Musk, who said on X in June that BEAD “is an outrageous waste of taxpayer money and is utterly failing to serve people in need.”
At the time, the NTIA didn’t consider Starlink eligible for BEAD money, but there have been signs that that was changing. SpaceX Chief Operating Officer Gwynne Shotwell said at a conference on Aug. 6 that SpaceX is working with the NTIA to determine whether Starlink could bid on BEAD projects and that it was “very interested in participating.”
The NTIA’s guidance says two requirements will need to be met to accept a Starlink bid: No government program is already funding alternative technologies in the area and no provider is already offering service that meets BEAD’s speed and latency requirements. In other words, this applies only to exceptionally rural and hard-to-reach areas.
If both of those are true, Starlink can begin showing documentation that it can connect every home in a given area up to BEAD’s standards.
But there’s no guarantee that Starlink can meet BEAD’s speed requirements of 100Mbps download speed, 20Mbps upload speed and latency of less than or equal to 100 milliseconds. The most recent Ookla speed test data shows Starlink users in the US got average speeds of 79Mbps download, 10Mbps upload and 58ms latency — below the requirements in every category.
The NTIA didn’t immediately respond to CNET’s request for comment on whether Starlink would be eligible with its current speeds.
Ali said he worries about the costs of providing the service in the future.
“My concern from the get-go after reading this guidance memo is, ‘Okay, what happens next?’ We are prepared for these extremely high cost areas to offer them broadband that will be very difficult to scale,” Ali said.
“Yes, it has to abide by the minimum criteria, but what happens 10 years down the line, when more and more folks are getting fiber and extreme high cost areas still remain extreme high cost areas.”
BEAD funding will pay for Starlink’s pricey equipment
Another core component of the BEAD program is affordability. The NTIA requires that internet providers applying for funds must ensure that “high-quality broadband services are available to all middle-class families … at reasonable prices.” While this requirement is ambiguous, a Pew study found that it could range from $107.64 in the Northeast to $84.79 in the South.
Starlink’s residential internet plan costs $120 per month, but the more onerous cost for many potential users is its $499 fee for equipment (on sale for $299 until Oct. 5). The NTIA noted in its guidance that these equipment costs “can be substantially more expensive” than with other providers and that these costs could be subsidized under BEAD to ensure that “installation and equipment costs are not a barrier to adoption” for people living in those areas.
“Something I was actually surprised by is that equipment cost has to be built in,” Ali said. “I was really glad to see this because I know that in my research, one of the major barriers for folks with Starlink is that initial cost.”
Starlink didn’t respond to CNET’s request for comment, but we’ll update this story as it develops.
Source: CNET
