The Broadband Heist Is About to Begin

And guess which billionaire with a satellite company is going to cash in?

USDA Photo by Lance Cheung

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This week, The New Republic published a piece I wrote about the fate of a $42.5 billion program passed as part of the 2021 infrastructure bill, which sought to at last bring high-speed internet to every household in America. Like many stories about the intersection of policy and politics, it’s extremely complicated, and the more reporting I did the more complicated it got. Knowing that space at TNR was limited, I wrote two versions of the article, one for them and one longer one to publish here, which they kindly allowed me to do.

There is a great deal of frustration around this issue, including among liberals disappointed that none of the money appropriated for this effort has yet gone out to the state governments that will deploy it. And while you might predict that the Republican Party would be the villain of the story, that’s mostly not true. While they have objected to what they describe as “woke” requirements in the law, most of them — especially at the state level — want to get the funds spent and the fiber installed.

There is a villain here — or more specifically, three villains, men who now hold power over the fate of this incredibly important project. Read on to learn more.

The Broadband Heist Is About to Begin

“We’re going to provide affordable high-speed internet for every American — rural, urban, suburban and tribal communities,” said Joe Biden in his State of the Union address in 2022. The next year he said the same thing: “We’re making sure that every community has access to affordable, high-speed internet. No parent should have to drive to a McDonald’s parking lot so their kid can do their homework online.” A year after that, he bragged that because of the bipartisan infrastructure law he signed in 2021, the government was “providing affordable high-speed Internet for every American, no matter where you live — urban, suburban, or rural communities in red states and blue states.”

It sounded like a terrific accomplishment, one that would benefit all Americans and stand as a point of pride in Biden’s legacy. But it wasn’t quite true.

In fact, while the infrastructure law Biden signed in November 2021 created the Broadband Equity, Access and Deployment Program (BEAD) with a whopping $42.5 billion to bring high-speed internet to every American household that didn’t have it, three years later it has not yet connected a single home. Now that the Trump administration has its hands on BEAD, they may take a lot of that money – as much as half of it, or even more – and give it to Elon Musk.

Should that happen, it will be yet another example of Trump’s contempt for established law and cruel indifference to the fate of his own supporters, many of whom (especially in rural areas, which Trump won overwhelmingly) lack broadband access. But the Biden administration will share a healthy measure of blame. This is a story of complex bureaucracy, well-intentioned people overlooking the ticking political clock they were working under, and lengthy delays that threaten to undermine the best chance we had of achieving a longtime liberal goal.

But it is not simply a story of the red-blue divide, of Democrats trying to use government to solve a difficult problem and Republicans trying to thwart them. The truth is that while Republicans have been critical of the BEAD program’s rollout, most of them, especially at the state level, share its goal and even now would like to help push it over the finish line. Their own constituents are the ones who will benefit most if and when BEAD delivers on its promise. But the program’s fate lies with three men: Donald Trump, Elon Musk, and Commerce Secretary Howard Lutnick. Together, the three could be about to execute a highway robbery.

Into the bureaucratic maze

The federal government has an almost absurd number of programs that seek to enhance internet access – 133, by the count of a 2023 GAO report, 25 of which have broadband as their primary purpose. But most of them are relatively small, doling out millions but not billions. Big Democratic spending bills including the Recovery Act under Barack Obama and the American Rescue Plan signed just after Joe Biden took office included substantial broadband funding as well, but it was never enough to get high-speed internet to everyone in the country. BEAD and its multi-billion dollar budget dwarfs them all, and was to be the program that would finally achieve the goal.

Here’s how it was supposed to work. First, the Federal Communications Commission had to complete a map that would identify every “unserved” and “underserved” area of the country, down to the level of individual homes, where there is either no broadband or substandard broadband available. With that information in hand, each state then drew up an initial proposal for how they would use their portion of the BEAD funding to approach 100% coverage. That was then followed by an iterative process between the National Telecommunications and Information Administration (NTIA), a part of the Department of Commerce, and state governments as the plans got more specific and refined, including detailing which internet service providers would be laying fiber and providing service. Eventually, the states get final approval from the NTIA and the money goes out.

It's even more complex and cumbersome than it sounds. The legislation creating BEAD laid out a 14-step process that would have to occur before the money is dispersed, one that included numerous elements advancing liberal goals, including requiring climate resilience assessments, prevailing wage requirements for workers, and extensive community input. These elements would become a target for Republicans, who complain that “woke” mandates have slowed the process down.

The FCC took a full year to draw up its map; only after that could the Commerce Department determine how much money each state would get. That determination was made in the spring of 2023, taking us to a year and a half after the law was passed – and a year and a half before the 2024 election. That process required an extraordinary level of detail, and became frustrating for many. One consultant working with states described to me a maddening back-and-forth as mid-level federal officials kept asking for more and more information, each time requiring days or weeks of work to produce addenda that almost no one would read and would have no effect on how the program ultimately worked. “It was process not only for the sake of process but for no reason at all. We lost 6 to 9 months in every state,” the consultant said.

Nevertheless, the states worked hard to produce their plans, enticed by the prospect of connecting all their citizens and mounting a federally-funded infrastructure effort that would produce local jobs. And not just blue states; among the ones that have gotten farthest along and produced the most comprehensive plans are a number of conservative states.

But despite how often Biden touted the accomplishment, when he left office, only three states – Delaware, Louisiana, and Nevada – had completed the process and gotten final approval from the Commerce Department, though they hadn’t yet been given their money so they can start digging trenches (and still haven’t). West Virginia has also completed its bidding process to select the local companies who will provide service, while 29 other states are deep into the process of taking and evaluating bids. The rest of the states have completed their initial plans and are close to accepting bids.

“Every state is at the table and is interested in completing this process,” says Sarah Morris, who as Deputy Administrator for the NTIA was one of the key Biden administration officials overseeing BEAD. “This is a program that is on the one-yard line.”

But the one-yard line is not the end zone, which is where the Trump administration comes in. One of the central pillars of BEAD is a preference for fiber connections rather than wireless or satellite; it will only fund satellite connections in places where installing fiber is so expensive or practically difficult as to make it all but impossible. Fiber provides a number of benefits: Not only will it create local jobs, it’s a piece of infrastructure that can attract people and businesses and will be around for decades, especially important in the rural areas that are yearning for reliable internet. When Tom Schaller and I traveled the country in 2022 reporting our book White Rural Rage, everywhere we went, whether it was West Virginia coal country, a Navajo reservation in Arizona, or the Albemarle region of North Carolina, people complained about the quality of their internet.

Under the BEAD rules as they exist, there is a place for satellite connections, but only to fill in the gaps. But in early March, newly minted Commerce Secretary Howard Lutnick, attacking the “woke mandates” of the program, announced that “The Department is ripping out the Biden Administration’s pointless requirements. It is revamping the BEAD program to take a tech-neutral approach,” which means discarding the preference for fiber. According to the Wall Street Journal, that could mean as much as $20 billion, or nearly half the original amount, could wind up going to Starlink, Elon Musk’s satellite internet company. Some experts I spoke to suggested the number could be even higher.

The idea of tens of billions of federal dollars being given to Starlink (and some to Project Kuiper, Amazon’s similar but less developed service) raises an important question: For what, precisely? If you have to deliver fiber to a remote farmhouse, the thousands of dollars it could cost make sense; it’s a physical connection that has to be built out. But rural residents can already get Starlink; they’ll have to pay $349 for the equipment and $120 a month for a mediocre version of the service BEAD requires, but they can get it right now (Starlink also has an $80/month option with slower speeds).

So what would the federal government buy if it gives Musk $20 billion? The answer is capacity, the bandwidth to add more customers. One might think that would be a minimal cost, but Starlink had a deal with Ontario to provide service to remote locations at an extremely high $6,667 per household (or $4,650 American). Ontario Premier Doug Ford recently cancelled it in response to Trump’s tariff threats against Canada, but it shows that Starlink is happy to charge something comparable to what it costs to install fiber.

As it now stands, states don’t have to take the lowest bid for a connection; they can use many considerations, including the fact that fiber provides more reliable service at higher speeds. But Secretary Lutnick has been talking up the idea of providing service at the lowest cost, which could provide an opening to Starlink. Since it can set the amount it would bill the government pretty much wherever it wants, Starlink can bid “one dollar less than whatever they think the low bidder is,” says Blair Levin, who helped lead broadband policy in the Clinton and Obama administrations.

Not long after Lutnick shocked everyone by saying he wanted to discard the program’s preference for fiber, Evan Feinman, who ran the BEAD program under Biden, departed his position and sent a scathing letter to his colleagues. “Stranding all or part of rural America with worse internet so that we can make the world’s richest man even richer is yet another in a long line of betrayals by Washington,” he wrote.

A three-way conflict

All this has set up a three-way conflict. Democrats would like the program to go forward as is. Republicans in Congress want to drop some of the “woke” requirements built into the program, but still want the money to go out as soon as possible. And their own GOP allies at the state level want to make sure they don’t have to rewrite their plans, which could push progress back years, and also are reluctant to give poorer satellite service to their constituents.

Yet they’re largely staying quiet; you’d be hard-pressed to find GOP governor, let alone a backbench congressman from Georgia or Tennessee, who will stand up and tell the two vindictive men who run our government that they should back off. The same is true of the telecom companies that have an interest in maintaining the program’s preference for fiber; they aren’t running ads or speaking out against Lutnick’s proposed changes. “I have not seen the kind of public campaign from governors or companies that you would normally expect in this political situation,” says Levin.

But a few Republicans have stressed the need to keep things on track. For instance, Sen. Shelley Moore Capito of West Virginia said, “West Virginia has jumped through every hoop to deploy the $1.2 billion in broadband funding, which is sure to be a game changer for our state’s connectivity goals. While I am all for improving the program, I do not want to see West Virginia wait longer than is necessary or have to redo their proposals and application.”

There isn’t much evidence that the triumvirate of Trump, Musk, and Lutnick has much of a problem with delay – or even scaling the project back. At Lutnick’s confirmation hearing, Sen. Jacky Rosen (D-NV) asked whether he would commit to releasing all the funds allocated to Nevada, especially since it was one of the three states that have already had their plans approved. Lutnick refused, saying only that he was committed to the goal of getting everyone broadband, but “I want to make sure that it’s done efficiently and effectively.”

Musk’s interest is obvious, and he has already influenced Trump’s thinking. “We’re spending a trillion dollars to get cables all over the country, up to upstate areas where you have two farms,” Trump said in a misinformation-filled appearance on Joe Rogan’s podcast last October. “Elon can do it for nothing.” Rogan agreed: “They spent $42 billion. They could have gotten Starlinks to everybody.”

Though only a tiny portion of that money has actually been spent (on the planning), it isn’t hard to imagine Musk telling Trump he can do it for less, Trump seeing it as a chance to cut funding and destroy another aspect of Biden’s legacy, and Lutnick enthusiastically carrying out their wishes.

If that happens, “I think most Republican governors would agree, you’ve hurt rural America for a long time to come,” says Blair Levin. “Why would the Trump administration want to both delay the rollout of broadband and end up giving rural America a worse product?” The state consultant I spoke with agreed. “This is something that every state wants so badly. And the more rural they are and the more economically challenged they are, the more they want it,” they said. But Trump has shown ample willingness to hurt his supporters.

One key lesson to take from the BEAD story is that as admirable as it is, careful and cautious policy design and implementation can be dangerous. Democrats have seen in the past how adept Republicans are at finding a single feature of a large bill and using it to demagogue the very idea of ambitious government spending (if you remember the name “Solyndra,” you know). That clearly made Democrats risk averse in many policy areas during the Biden years, working hard to cross every T and dot every I. But that takes time, and time can become the enemy of a policy’s durability.

There may not have been a world in which all $42.5 billion appropriated for BEAD could have been out the door by the time Joe Biden’s term ended on January 20. But there is a world in which speed was given a higher priority, and the process would have been far enough along that it would have been significantly more difficult for the Trump administration to wind it back.

To be fair, few could have anticipated the sheer malevolence of this administration – or the possibility that both Democrats and Republicans would agree on the necessity of a program like BEAD, have differences that are real but manageable, then watch while the needs of millions of families and communities are pushed aside so Elon Musk can get a publicly funded windfall. But that’s just what might happen.