Advocates: Fine Print in New BEAD Notice Favors Satellite Providers
Officials say LEO providers could skirt performance benchmarks others must meet in half the time.
HOUSTON, June 24, 2025 – As broadband officials dig into the fine print of updated guidance governing a $42.45 billion federal broadband expansion program, many raised concerns Monday about new advantages carved out for low-Earth orbit satellite providers.
One of the clearest examples, they argued, was a provision under revised rules for the Broadband, Equity, Access, and Deployment program, that gives satellite providers up to 10 years to meet performance benchmarks — more than double the four years allowed for fiber and other technologies to comply. The rules, released by the Commerce Department earlier this month, purport to be “tech neutral,” but critics continue to find biases within them.
“Don’t talk to me about technology neutrality when you’ve just given the worst technology the best odds of getting awards,” said executive director of the American Association for Public Broadband Gigi Sohn, prompting a lively exchange with a roomful of local broadband officials, rural advocates, financiers, and internet service providers, here at the opening day of the Broadband Communities Summit in Houston.
FROM SPEEDING BEAD SUMMIT
Panel 1: How Are States Thinking About Reasonable Costs Now?
Panel 2: Finding the State Versus Federal Balance in BEAD
Panel 3: Reacting to the New BEAD NOFO Guidance
Panel 4: Building, Maintaining and Adopting Digital Workforce Skills
Buried in Appendix B of the Commerce Department’s 23-page policy notice restructuring BEAD was a suite of provisions that broadband advocates said disproportionately benefit satellite providers.
Under these “LEO Capacity Subgrants,” states may reimburse providers over a 10-year period, advance up to 50% of funding before any subscribers are signed up “at the time the subgrantee certifies the availability of service throughout the project area,” and reduce standard financial safeguards like Letters of Credit based on soft milestones.
“You can actually use the BEAD funding to pay [subscribers] monthly fee, per the Appendix,” said Angela Bennink, general manager of Kitsap Public Utility District, chiming into the discussion from the audience. Bennink argued that reimbursing satellite providers based on subscriptions metrics, over an extended timeline, functionally mirrors a monthly service subsidy.
BEAD was originally framed as an infrastructure program
While BEAD was originally framed as an infrastructure program, with traditional awards tied to capital projects, like fiber builds or fixed wireless installations, Appendix B introduced a model under which LEO providers don’t have to construct anything.
“LEO subgrantees will receive funding for solely reserving capacity rather than constructing a physical network,” the updated BEAD notice states on page 21.
“This was an infrastructure bill and infrastructure fund. But, this infrastructure is already built,” said Tom Magg, CEO of Community Broadband Networks, speaking from the audience.
Several audience members voiced doubts that satellite providers could realistically meet BEAD’s performance benchmarks, set in statute under the Infrastructure Investment and Jobs Act – including minimum speeds of 100 * 20 Megabits per second (Mbps) speeds, sub-100 millisecond latency, and strict reliability metrics such as limits on service outages.
Bennink of the Kitsap PUD questioned whether their state’s rejection of satellite as a viable solution would be overruled. “If we included language that says satellite does not meet our [state’s] needs,... will it be shut down?” she questioned.
“Washington is also an area where they have added a premium to sign up for Starlink because there's no capacity,” Bennink added. “So, we're in this huge conundrum. There are still multiple lines in that notice saying, ‘NTIA can just say no, they don't agree, and throw it out.’”
“The good news [LEO providers] have to show technically what they do,” Sohn said. “There's a whole separate provision that requires an applicant to show that they have the technological, managerial, financial capability to actually do what they say.”
However, Sohn noted that Commerce appears inclined to rely on the satellite providers’ own estimates rather than conduct a rigorous review.
