TAMPA, Fla. — SpaceX has accused Virginia of shutting Starlink out of most of the state’s $613 million in subsidies under a federal broadband program, despite offering to connect virtually all targeted households for about one-tenth the cost.
Virginia picked the low Earth orbit (LEO) network for around 4% of the roughly 127,000 locations under consideration for subsidized installations under BEAD, or Broadband Equity, Access, and Deployment, despite Trump administration efforts to give satellites equal footing with fiber.
“Simply put, Virginia has put its heavy thumb on the scale in favor of expensive, slow-to-build fiber bias over speedy, low cost, and technology neutral competition,” SpaceX wrote in an Aug. 13 letter to the state’s Department of Housing and Community Development (DHCH).
SpaceX claimed Virginia failed to follow federal rules for technology neutrality and did not run a competitive grant process, relying on undisclosed third-party analysis it says is at odds with Starlink usage data.
“95% of BEAD locations in Virginia have an active Starlink subscriber within 1 mile,” SpaceX wrote, and 15% within 100 meters, “showing that Starlink already serves every type of environment in Virginia’s BEAD program today.”
Virginia’s DHCD did not respond to a request for comment.
The state’s final BEAD proposal is due to be submitted to the Department of Commerce’s National Telecommunications and Information Administration (NTIA) for approval, following a seven-day public comment period that ended Aug. 13. The plan requires that subsidized services be deployed within four years of funding awards.
Amazon’s proposed Project Kuiper LEO constellation is in line for $4.5 million of the subsidies for 6,957 locations, more than the $3.3 million SpaceX would get for 5,579 sites.
A recent blog post from broadband consultancy Vernonburg Group, based on Starlink Gen 2’s current specifications and capacity, estimated that at most, LEO satellites could serve about one-fourth of BEAD-funded locations nationwide.
Vernonburg participated in Virginia’s public comment period. Alex Jeffery, a senior public policy manager at Vernonburg, said the state’s decision to allocate about 10% of its BEAD locations to LEO “falls squarely within the range” of what such systems can support, based on the firm’s analysis.
“We applaud Virginia’s decision to leverage the full mix of technologies, and based on our analysis think that they’ve made an appropriate allocation for LEO,” Jeffery said, adding that Vernonburg did not provide any direct analysis to Virginia beyond its public comment.
Louisiana also recently released its final BEAD proposal, with a public comment period ending Aug. 15. SpaceX is currently earmarked for $7.8 million of nearly $500 million in Louisiana subsidies, or about 1.6%, with $783,000 left unallocated for potential LEO awards.
SpaceX did not respond to a request for comment.
A total of $42.5 billion in funding is up for grabs under BEAD, a Biden-era program Congress created in 2021 to help close the country’s digital divide, initially with a focus on fiber but restructured by the Trump administration to help accelerate deployments.