[News] SpaceX bashes Virginia's BEAD results

The following article appeared on Light Reading:

Well that didn't take long.

Just days after Virginia presented a revised and relatively fiber-focused plan for the Broadband Equity Access and Deployment (BEAD) program, Elon Musk's SpaceX is seeking to block it.

SpaceX, the company behind the Starlink low-Earth orbit (LEO) satellite broadband service, believes that Virginia's plan basically ignored what it believes to be a much better (and much less expensive) satellite-focused proposal.

"Virginia received a proposal from SpaceX to serve virtually every BEAD-eligible household in Virginia with high-speed broadband for $60 million, available to Virginians immediately," SpaceX argued in an August 13 letter to the Virginia Department of Housing and Community Development.

Virginia's proposal, SpaceX added, is to spend $613 million on projects "that will be deployed at some point within the next four years, if ever, resulting in taxpayers overspending for connectivity in Virginia by ten times the necessary amount."

Per an analysis from New Street Research's Blair Levin, Virginia's proposal, if it holds, appears to show that about 81% of roughly 130,000 BEAD-eligible locations will be served by fiber. That compares to 10% with satellite, 8% by hybrid fiber/coax (HFC) and just 1% from fixed wireless access (FWA). Louisiana's BEAD proposal is also predominantly fiber-focused (80% fiber, 9% satellite, 5% HFC and 6% FWA).

SpaceX also argued that the process violates the new rules under the Trump administration, and argued that its LEO-based platform has shown that it qualifies for Priority Broadband under BEAD, including provisions to deliver speeds of 100 Mbit/s down by 20 Mbit/s upstream and latencies less than 100 milliseconds. More generally, Priority Broadband under BEAD must be "easily scalable" and "capable of supporting 5G."

Virginia's plan, SpaceX added, "indicates in the Final Proposal that it determined that 95%-plus of SpaceX's initial application did not qualify as 'Priority Broadband.' To date, Virginia has not provided SpaceX with any information, rationale, or justification to support this determination."

As a result, SpaceX believes "NTIA must deny Virginia's Final Proposal."

SpaceX's argument enters the picture after the NTIA revised BEAD rules to prioritize lower-cost options, a decision that seemingly deprioritizes fiber while opening the door to satellite broadband and FWA. States are now resubmitting bids.

Speaking at last week's The Independent Show in Salt Lake City, Thomas Cohen, an attorney with Kelley Drye & Warren LLP that provides counsel to ACA Connects, said the BEAD results from Louisiana and Virginia might serve as a "template" for what's to come.

SpaceX complaint could lead to more, and further delay BEAD

In a research note (registration required), Levin says he believes that SpaceX is "likely" to challenge the Louisiana proposal and "other states where wired gets more of the funding." That could cause Virginia and Louisiana, and other states with similar plans, to modify their plans, at least incrementally, Levin added.

Update: On cue, SpaceX on Monday also sought to reject Louisiana's BEAD plan, Broadband Breakfast reported Monday. Like the Virginia instance, SpaceX believes that more of its satellite broadband bids should have been accepted. 

But Levin also points out that US states aren't required to respond to SpaceX commentary. "[T]he only process that will matter will be the NTIA review of the states' proposals," Levin added. "The SpaceX petition raises the prospect for litigation, but the prospects for any litigant succeeding are low."

Levin also warns that if NTIA agrees with SpaceX on such matters, it will only delay the program further.

While it's not yet clear how NTIA will respond, Levin says he could see US Secretary of Commerce Howard Lutnick "attempt to forge state-by-state compromises."

In a LinkedIn post, Gigi Sohn, executive director, American Association for Public Broadband, likened SpaceX's complaint to an attempt at "saber rattling and frightening other states into granting the company more locations even if they can't provide priority broadband service, which contrary to this filing, isn't met with 100/200 speeds and 100 millisecond latency."

Sohn also noted that Amazon's Project Kuiper, a LEO service under development, has yet to complain, "so this just seems like typical Musk-style bullying."

LEO limitations?

Meanwhile, a new analysis pokes some holes in how well LEO-powered providers can scale up to serve BEAD locations.

According to Vernonburg Group, while LEO providers are well-positioned to reach rural areas cost-effectively, they can "realistically serve at most 26% of BEAD-eligible unserved and underserved locations nationwide."

Vernonburg Group said it based its analysis on the percentage of BEAD-eligible locations that LEO satellite could realistically serve while satisfying BEAD's speed, latency and reliability requirements.

Editor's note: The story has been updated to note that SpaceX has filed a similar complaint against Louisiana's BEAD plan.