Commerce Secretary’s proposal to prioritize satellite over fiber internet would ‘strand’ rural communities, experts say
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Howard Lutnick’s proposal to change BEAD structure will line the pockets of billionaires and leave rural communities behind.
This article first appeared on The Daily Yonder and is republished here under a Creative Commons license.
In early March, U.S. Secretary of Commerce Howard Lutnick proposed changes to a federal broadband connectivity program that would favor Low Earth Orbit (LEO) satellite connectivity, like Starlink, over fiber optic, a faster and more reliable form of internet access.
Critics say Lutnick’s proposal to prioritize LEO will worsen the digital divide by abandoning rural communities without the long term economic benefits of fiber optic infrastructure.
Broadband Equity, Access, and Deployment, or BEAD, is a $42 billion grant program created by the Biden administration under the Infrastructure, Investments, and Jobs Act of 2021. BEAD aims to connect 25 million Americans with high speed internet in all 56 states and territories.
In a meeting with BEAD staff earlier this month, Lutnick said he wants to make the program “technology-neutral” by shifting the focus to LEO satellite connectivity. Wall Street Journal reporter Patience Haggin said that Lutnick’s proposal would make it easier for Elon Musk’s LEO satellite technology, Starlink, to claim funds allocated for rural broadband development.
Lutnick’s proposed changes would exacerbate the digital divide between rural and urban residents, according to the Benton Institute’s Broadband & Society Director of Policy Engagement Drew Garner. The Benton Institute is a nonprofit that focuses on broadband access.
Garner told the Daily Yonder that fiber optic infrastructure is faster, more reliable, and a larger driver of economic growth compared to satellite internet technology.
BEAD Program Is Integral to Rural Broadband
Rural households are less likely to have access to high speed internet compared to their urban and suburban counterparts. In 2023, the most recent year of available data, an estimated 84% of rural households had broadband, compared to 91% of metropolitan households, according to American Community Survey data.
Fifty-six percent of nonmetropolitan counties have low access to broadband, compared to the national average. Only 18% of metropolitan counties have below average access.
Counties with low broadband connectivity often overlap with counties that also have legacies of discrimination and disinvestment, like the U.S. / Mexico border and rural Appalachia, among others regions. But federal broadband programs like BEAD were meant to bridge that geographic gap.
"The BEAD Program is on course to ensuring that every location in the U.S. has fast, reliable, and affordable internet access over networks that can be easily upgraded to keep up with the connectivity demands of Americans for decades to come,” Garner wrote in a March 4th press release. “Secretary Lutnick's reported meddling is likely to leave millions of Americans with broadband that is slower, less reliable, and more expensive.”
Executive Vice President of the NTCA - the Rural Broadband Association Mike Romano said that BEAD funding is critical in the effort to connect areas where larger internet providers haven’t previously had the financial incentive to invest.
“Some of the areas that are left behind are, frankly, some of the hardest to reach,” Romano told the Daily Yonder in a phone interview.
Developing fiber networks can be expensive, particularly in rural areas with cold climates (and therefore shorter construction seasons) or in remote communities with low population densities.
But BEAD is meant to help defray the costs of broadband deployment by allocating funds to states and U.S. territories based on a formula that considers served and unserved populations. After connecting all unserved households with high speed internet, states and territories can invest in programs that advance broadband equity, like remote learning and telehealth services, for example.
“Fiber is correlated with increased entrepreneurship, increased business revenues, increased uses of telehealth and associated decreases in healthcare costs,” said Garner.
High speed internet is also correlated with better student outcomes and lifetime earnings, according to Garner.
“In contrast, paying Starlink for a network that already exists, and that has almost no terrestrial infrastructure, has no discernible economic benefit for any state or community,” wrote Garner in a Benton Institute press release.
Starlink subscriptions are expensive, with a going rate of about $120 per month plus an extra $300 or $400 for the equipment itself. Garner said that Starlink, although it is “an amazing technology,” hasn’t caught up with the benefits of fiber.
Prioritizing LEO Satellite Connectivity Will Worsen the Digital Divide
A 2023 consumer report from the Fiber Broadband Association revealed that consumers prefer fiber broadband over other forms of internet connectivity for speed and reliability. Under the Biden administration, the BEAD program prioritized fiber projects because of its economic sustainability and ability to replace existing infrastructure.
While low-earth-orbit connectivity relies on signals from satellites, fiber optic cables are usually laid underground, where they are less susceptible to interference from bad weather, foliage, and terrain.
Lutnick’s plan to prioritize satellite connections over fiber optic could “strand rural Americans with worse internet access,” while increasing the share of funding available to low-earth-orbit satellite companies like SpaceX’s Starlink, according to technology reporter Jon Brodkin.
Garner said that investing in fiber optic over satellite connectivity is better for rural economies.
“You build a fiber network once and it lasts for 30 to 50 years,” said Garner. “You have to rebuild a LEO network every five [years]. That's because satellites fall out of the sky, so you have to keep relaunching them.”
Under Lutnick’s proposed changes, Starlink could receive $10 to $20 billion, up from the $4.1 billion allocated under the program’s original plan. Lutnick is also considering reducing obligations to serve low-income populations, according to the Wall Street Journal.
"Secretary Lutnick may wish BEAD to be 'technology-neutral,' but we shouldn't be technology-blind,’ Garner said. “American broadband should be the best broadband in the world."
