Amid federal pushes away from fiber broadband, Texas kicks off satellite pilot program

Texas’ statewide broadband office on Wednesday announced grant applications are open for a new low Earth orbit satellite program that signals a shift in how the nation is developing its broadband infrastructure.

The Texas Low Earth Orbit Satellite Broadband Grant Program is a $30 million state-funded pilot program to connect particularly remote and rural locations with satellite internet. These are locations where building traditional, fiber-optic infrastructure could be costly.

Every state has receiving funding to expand broadband through the $42.45 billion Broadband Equity, Access, and Deployment, or BEAD, program, which was billed as a “bold” step toward universal high-speed internet access by 2030 by the Biden administration. But Commerce Secretary Howard Lutnick last month announced plans to change to the program, including allowing states to give more of their BEAD award allotment to satellite providers.

BEAD’s strict “fiber first” stipulations also created hurdles for states with isolated areas and tough terrain, which led federal lawmakers this year to introduce legislation that would streamline the program’s requirements and make all technologies, such as LEO satellite services and fixed wireless, equally eligible for BEAD funds.

Some states are also pushing for alternatives to fiber-optic builds. Louisiana Gov. Jeff Landry, a staunch Trump loyalist, in January asked Lutnick to change BEAD’s requirements so states can more easily fund alternative technologies, like satellite internet.

Maine last year spent $5.4 million installing 9,000 free Starlink terminals to locations where fiber connections would have been costly. The move received praise from some groups. The conservative think tank American Enterprise Institute issued a statement noting that “embracing LEO satellites offers a way to let Americans choose broadband now if they wish — not years from now.”

New Mexico’s broadband office last fall requested $70 million from the state to connect 95,000 “underserved” locations with satellite. The proposal, which was not adopted, would have provided providing businesses and households with free Starlink terminals.

But the push to make more government dollars available for satellite providers comes at a time when Elon Musk, owner of prominent LEO satellite company Starlink, is working as an adviser to Donald Trump’s administration as head of its controversial Department of Government Efficiency unit.

Musk and his satellite internet company are also facing scrutiny following the announcement that, along with Starlink’s many state and local government contracts, the company last month “donated” its satellite services to provide the White House with a new Wi-Fi network.

Musk potentially stands to gain billions of dollars in Starlink contracts if BEAD’s rules are changed. The proposed changes to broadband programs also present questions of whether states are pursuing satellite as an alternative to fiber for technological reasons or only to curry favor with the president.

Texas to the stars

While Texas’ LEO pilot program was announced in January, just after the start of Trump’s second term, it’s funded through the state’s $1.5 billion Broadband Infrastructure Fund, which was created by the legislature in 2023 to provide state funds to expand access to reliable, high-speed broadband connectivity. The pilot will assess the feasibility of using LEO satellite technology for connecting locations that may not have received acceptable bids from ISPs through BEAD.

Kevin Taglang, executive editor at the Benton Institute for Broadband & Society, said that while the pilot program “seems like a smart thing to do,” satellite internet technology is difficult to maintain or modify, which would makes it difficult to improve service as demand increases or technologies change.

“It’s the speed capacity that is going to grow, whereas with fiber, you can grow the capacity as needed down the line,” Taglang said. “We think that would be a huge waste of opportunity because we have the chance to build infrastructure out to these communities that would last 30 or 40 years. And LEO is something they have to replace satellites every five years or so, so it seems like a better long-term investment to invest in fiber networks.”

In addition to the shorter lifespan of satellite internet infrastructure, Steve Schwerbel, director of state advocacy at the Wireless Internet Service Providers Association, said it’s likely programs like Texas’ pilot may create over-funding, as some underserved locations identified for the program may already be covered under BEAD. A spokesperson from the Texas Comptroller’s office told StateScoop that underserved areas that receive funding under this program would remain eligible for BEAD.

“This Texas program, and with all of these states that might be considering some sort of LEO funding specifically, these locations are all going to be immediately subject to BEAD-funded over build for the same reasons that unlicensed fixed wireless networks are,” Schwerbel said. “We encourage legislators and the state broadband offices, as they’re thinking about these things, to be very careful about how money is being spent, and if that money is duplicative.”

‘False promise’

The push to make more broadband dollars available for satellite comes as several state and federal officials have criticized of the BEAD program for not just its technical hitches, but rather its political implications.

In announcing his proposed changes to BEAD, Lutnick — an unwavering loyalist who “is constantly auditioning for Trump’s approval,” an anonymous source with knowledge of the matter shared with Politico last month — said his motivations stemmed from the program’s “woke mandates, favoritism towards certain technologies, and burdensome regulations” put in place by the Biden administration.

Though Elon Musk’s SpaceX, the umbrella company for Starlink, recently relocated its headquarters to Texas, a spokesperson for the Texas Comptroller of Public Accounts, which houses the state’s broadband office, said the LEO pilot program “is a competitive solicitation and there are no preferences based on a provider’s geographic location in Texas.” However, Taglang, at the Benton Institute, said Musk’s shadow on state and federal technology policy isn’t a partisan issue.

“We have the richest man in the world who paid more to get Republicans elected in the last cycle than anybody’s ever paid before — and probably multiple in their whole lifetimes — who now has this quasi-government position that’s powerful enough to be firing thousands of people or slashing budgets and closing agencies,” Taglang said. “And that person, his company, could gain the most from changes in that would allow for the technology his company provides to win more government dollars. Like, does this really have to be a Republican/Democrat problem?”

Schwerbel said the results of the Texas pilot and how it navigates the risks of double-funding with BEAD in certain areas could influence leaders in Washington about the federal program’s future — especially officials who may be more concerned about achieving certain policy outcomes guised in critiques of the program costliness, instead of accomplishing the program’s goals of connecting more folks to reliable internet.

“We face kind of a similar challenge across both satellite and unlicensed fixed wireless with some government bureaucrats in D.C. saying, for various more or less political reasons, we’re going to choose to build right over the top of you because we just want certain policy outcomes, rather than this neutral standard that we can meet,” Schwerbel said. “So I certainly think it may well give leaders in Washington some reason to reconsider whether we should be duplicating some of those funding approaches, or whether that money could be better spent elsewhere.”

Not all state leaders are enthusiastic about the prospect of providing more government dollars for satellite. A bipartisan group of 115 state legislators last week sent a letter to Lutnick with concerns about the proposed removal of the BEAD program’s preference for fiber builds. These changes, the legislators wrote, could delay the deployment of internet connectivity infrastructure funded by BEAD by a year or more, or in some cases, force states to restart their broadband grant programs entirely.

“We were going towards a point where just about everybody was going to be able to afford fiber to the home, which is an amazing thing,” Taglang said. “But to go then to getting satellite, and then people still not being able to afford it, because it’s a costly service to begin with, and not having the subsidy as well, it seems like we’re headed towards a false promise in a way, and that for some people, they’re still going to be disconnected after all this.”