Digital Equity Suit Paused Until New Funding Notice
NTIA is planning to take applications on reinstated broadband adoption funding in December
WASHINGTON, Aug. 19, 2026 – A federal judge agreed Tuesday to pause the legal challenge over the Trump administration’s cancelation of broadband adoption funding.
The National Digital Inclusion Alliance, a nonprofit that had won funding under the axed program, said it agreed to pause its litigation to give the Commerce Department time to issue a new notice of funding opportunity (NOFO).
NDIA “reserves the right to move to lift the stay and continue the litigation should the NOFO be inconsistent with the statutory requirements,” attorneys for both sides said in a joint update Monday.
The stay will extend until two weeks after the NOFO is issued or Jan. 15, 2027, whichever is earlier, District Judge John Bates ruled. Commerce’s National Telecommunications and Information Administration is planning to release the NOFO and accept applications in December.
Both sides are meeting to discuss the NOFO by Oct. 16, and will have to periodically update Bates after that.
NTIA is working on a new NOFO after Bates ruled that one provision of the Digital Equity Act was unconstitutional. During oral arguments the government’s lawyer said the program could continue if that section were struck.
The provision said the law’s funding should support programs aimed at increasing broadband adoption among racial minorities. Bates said last month he agreed with the Trump administration that was impermissible race-based discrimination, but expected the adminstration to restart the program with that provision gone.
Other eligible populations like the elderly and veterans were left in place.
The law provided $2.75 billion in total funding, but the case centered on a $1.25 billion program for nonprofits, called the Digital Equity Competitive Grant Program. That’s the only program being reinstated.
NDIA disagreed that the provision was unconstitutional and was pressing a broader case that the White House lacked the authority to cancel the program unilaterally, but ultimately decided holding off on the lawsuit for now “will allow NTIA to focus on reinstating the Competitive Grant Program consistent with its statutory requirements,” attorneys wrote Monday.
The group attached an exhibit to the status update that laid out what it wanted to see in the reinstated competitive grant program. That included making all the funding available at once (it had previously been staggered) and allowing the 65 organizations that had originally been recommended for awards to resubmit their applications.
The group also wanted a 60-day application window, and for awards to start being made 45 days after that.
NTIA didn’t like the idea of NDIA offering suggestions.
“It is not proper for a private party (much less a putative grant applicant) or the Court to supervise NTIA’s day-to-day operations,” wrote Brett Shumate, assistant attorney general in the Justice Department’s civil division. “Plaintiff may not reshape this case into a vehicle for general interest-group oversight of the agency.”
The agency canceled most of its Digital Equity Act funding last year, aside from a $250 million portion for Tribal entities.
The day prior, President Donald Trump posted on his Truth Social platform that he and Commerce Secretary Howard Lutnick considered the law’s programs “a RACIST and ILLEGAL $2.5 BILLION DOLLAR giveaway” that he was ending “IMMEDIATELY.”
