SpaceX finds itself at odds with states regarding internet financing, pushing for a satellite-first strategy amid rising demand for direct internet access. In a submission to the Louisiana Office of Broadband Development and Connectivity on August 15, the firm accused the state of misusing taxpayer funds and succumbing to “fiber lobbyists” by dedicating $400 million to state fiber projects while allocating merely $7.7 million for Starlink implementation. SpaceX asserts it can connect “virtually all” households in need for less than $100 million. Recently, the company leveled similar charges against a funding proposal in Virginia, which designated just $3.2 million to them.

Satellite internet operators like Elon Musk’s Starlink are calling for increased investments in Low Earth Orbit satellites (LEOs) and fixed wireless broadband, arguing that this approach is a more economical way to achieve widespread internet access compared to exclusive fiber solutions. The Trump administration has struck agreements with Starlink, including an unauthorized deployment of Starlink WiFi at the White House, while the company has appealed for enhanced federal backing from agencies like the FCC.

Nonetheless, rural internet advocates contend that satellite internet is not a holistic fix for unconnected Americans. Although beneficial for regions with geographical obstacles and emergency communication needs, satellite connections suffer from scalability problems for universal coverage and fail to bridge the expanding divide between high-speed and low-speed regions. Concerns have also been voiced regarding satellite network capacity and access to essential spectrum bandwidth. LEOs are considered less dependable than fiber and are unable to deliver the faster, gigabit speeds provided by fiber initiatives.

SpaceX’s stance signifies a change in priorities for the new administration and the FCC. Earlier this month, the Trump administration revised state internet grant criteria managed by the National Telecommunications and Information Administration (NTIA). A newly updated FAQ for grant applications indicates that states may be excluded from federal broadband funding if they try to regulate the basic pricing of high-speed internet plans for low-income families. This requirement is a part of the Broadband Equity, Access, and Deployment (BEAD) grants, which obligate ISPs to provide low-cost broadband service options for qualifying subscribers if they receive federal BEAD funding to enhance internet access—some states have intervened to guarantee that these “lower” cost plans remain affordable.

The NTIA has also restricted the establishment of standards for “community anchor institutions,” which was previously a flexible category enabling states to secure funding for institutions and organizations that deliver community support, such as libraries, hospitals, colleges, and other services that are not necessarily state-run.

In 2023, the Biden administration unveiled the $42 million BEAD program, following the landmark Tribal Connectivity Program (initiated under the Affordability Connectivity Program) that aimed to tackle the digital divide—not only internet access but also reliable, high-speed internet that is typically provided through fiber connections. BEAD’s Middle Mile program allocated resources to link rural, disconnected communities to high-speed broadband internet via new fiber infrastructure (“Fiber First” condition). The FCC redefined broadband speed objectives in 2024, viewed as a triumph among advocates for universal internet access.

However, fiber deployment initiatives financed by BEAD have faced challenges due to the new administration’s “technology neutral” guidelines. Trump’s FCC chair, Brendan Carr, has lowered previous broadband speed aspirations to align with telecom and media allies in his pursuit to restrict free speech protections.