from the billionaires-win-again dept
So I’ve noted how Republicans are rewriting the 2021 infrastructure bill (they voted against) to ensure that billions of dollars in taxpayer-funded broadband grants wind up in the back pocket of Elon Musk and Jeff Bezos (and their low-Earth orbit (LEO) satellite broadband ventures, Starlink and Project Kuiper).
I’ve also explained in detail why that’s a problem: these networks may be initially cheaper to deploy, but the networks lack the capacity to actually scale to meet demand. Data indicates they harm astronomy research and the ozone layer. Money directed toward Jeff Bezos and Elon Musk is also money directed away from higher-capacity, faster, locally-owned (and usually cheaper) fiber and wireless alternatives.
Quick background: the 2021 infrastructure bill created a $42.5 billion grant program dubbed the Broadband Equity, Access, and Deployment program (BEAD). BEAD is overseen on the federal level by the NTIA, but individual states are largely going to be in charge of how money is spent.
A few months ago, the Trump administration retooled the program in order to strip away any language related to climate, fair labor practices, equity, or affordability. But the changes also urged states to redirect as much money as possible to Bezos and Musk.
Most states were happy to purge their BEAD plans of any language ensuring that taxpayer-funded broadband is actually affordable. But not all states have been quite as quick to slather Musk with the kind of subsidies he wants. Virginia, for example, released a plan that continues to primarily fund fiber networks over satellite, something Space X and Starlink immediately started to whine about.
Other states, like Colorado, have been more quick to appease billionaires. Colorado, for example, recently unveiled a BEAD spending plan where Bezos and Musk won 50% of the state’s approximately 90,000 eligible locations of homes and buildings deemed to have no internet or subpar speeds of less than 100 mbps down, and 20 mbps up (the FCC definition of broadband).
Colorado doled out $25.4 million BEAD award to Amazon, despite the fact that the company’s LEO network is barely operational. Starlink received $9.16 million for 5,400 locations. The two companies won the bids because they promised to do it so much more cheaply than other companies, including cellular or fixed wireless providers:
“The LEOs were primarily picked because they could do it much cheaper than everyone else, Reitter said.
“LEO was really aggressive in their coverage and also their pricing,” she said. “They decreased their cost per BSL (broadband serviceable location) quite a bit to be more competitive against the other technologies. Fixed wireless is probably their main competitor.”
But again, simply stating that these LEO satellite systems are cheaper to deploy that cellular, fixed wireless, or fiber is extremely misleading.
Starlink has been criticized for harming astronomical research and the ozone layer. Starlink customer service is largely nonexistent. It’s too expensive for the rural Americans most in need of reliable broadband access. The nature of satellite physics and capacity means slowdowns and annoying restrictions are inevitable, and making it scale to permanently meet real-world demand is expensive and not guaranteed (especially given the ongoing problems with Space X’s Starship).
One recent study found that Starlink struggles to deliver the FCC’s already flimsy definition of broadband – 100 megabits per second (Mbps) down, 20 Mbps up – in any areas where Starlink subscribership exceeds 6 households per square mile. In many areas, these capacity constraints are causing Starlink to issue “congestion” charges as high as $750.
Ideally, if you’re going to spend taxpayer money on broadband, you want to prioritize pushing fiber as deeply into rural America as you can. From there, you want to leverage higher-capacity cellular and fixed wireless. After that, you can leverage LEO satellite broadband to fill the gaps. And you probably want competent regulators to prevent telecoms from ripping off captive customers in monopolized areas.
Especially given that one of the two companies is led by a highly erratic, extremely conspiratorial, overt white supremacist with a history of empty promises and labor violations.
Hoping to appease their billionaire friends, Republicans have turned this program on its head. So unfortunately, that means in many states, a big chunk of your taxpayer money is being directed away from locally-owned fiber and wireless companies, cooperatives, or city-owned utilities, and toward unproven LEO satellite ventures with a long list of caveats.
This is, of course, complicated by the fact that lobbyists for our biggest, shittiest cable and phone companies (also traditionally directly allied with Republicans) are also in the mix, trying to direct money their way, and away from more popular alternatives (like the surging number of municipal broadband projects scattered around the U.S., or the kind of popular city-owned utilities in cities like Chattanooga).
States that resist the Trump administration’s desires to ignore affordability and slather Musk with subsidies risk having their funding plans rejected entirely by the NTIA, potentially losing out on billions in historic broadband subsidies. So it will be interesting to see how hard states are willing to fight over the next six months or so.
Should Musk and friends get what they want, in a few years, when these LEO networks are overloaded and over-billing captive customers in rural locations, a lot of these policymakers will slap a stupid look on their faces and wonder how it happened. But because the Trump administration has also taken a hatchet to federal regulatory oversight, holding these satellite companies (or giant telecom monopolies) accountable when they once again fail to deliver will be an uphill climb.
Filed Under: bead, colorado, elon musk, fiber, jeff bezos, leo, ntia, satellite, states, subsidies, telecom, wireless
Companies: amazon, spacex, starlink
