Satellite BEAD Awards to be Reduced
NTIA said the new FCC broadband coverage map showed expanded terrestrial service in rural areas
WASHINGTON, July 14, 2026 – States are being asked to remove as many as half the locations they awarded to satellite ISPs under the Broadband Equity, Access, and Deployment program, according to four state officials familiar with the matter.
Satellite accounted for about 20 percent of the program’s 3.9 million locations, and satellite grantees were set to receive more than $1 billion collectively. Both of those numbers are set to be reduced.
The National Telecommunications and Information Administration sent states lists of locations marked for removal last week, the officials said. They were granted anonymity to speak freely about the issue.
NTIA told states the locations were no longer eligible for funding because the Federal Communications Commission’s latest broadband coverage map, published earlier this month, showed one of two things: the locations were not the kind of structure that needed broadband, like a shed or barn, or that the locations were already in fact served by a terrestrial ISP.
State officials said the requests were almost entirely limited to locations awarded to low-Earth orbit satellite providers. In multiple states that amounted to around half their awarded LEO locations being made ineligible, but the amount varied.
An NTIA official said in an interview that the agency didn’t have a national count of the affected locations immediately available.
The official said satellite locations were marked for removal because the program pays satellite participants for capacity reservation, rather than a physical network build.
Cutting locations from a fiber project might make the build unviable and cause the provider to pull out — something that has happened in multiple states — but the LEO projects are location-by-location and can be tailored more.
The official said the move was an outgrowth of the agency’s May FAQ update that noted LEO grant winners “may not be reimbursed for ineligible locations.”
They said it was at least possible LEO grants would be modified in the future, and that the agency would continue to monitor changes to the FCC’s map.
The FCC broadband coverage map is updated every six months, and the ninth version was published last week. The NTIA was previously working with version six, the official said.
The Trump administration altered the $42.45 billion program’s bidding rules last year and made it easier for satellite providers to compete for grant dollars.
Under NTIA-approved state spending plans, there are more than 735,000 locations nationwide set to receive LEO broadband under the program. That doesn’t include California and Illinois, which are still going back and forth with the agency on approval.
“Losing half of these is either not connecting ~365K homes… or it's simply a tough look for earlier versions of the fabric,” Doug Adams, head of broadband marketing firm Broadband Marketers, wrote on Broadband.io Monday.
In all states’ draft spending plans, which have been modified slightly before NTIA approval, SpaceX was set to receive nearly $739 million and Amazon Leo, the only other LEO provider in the U.S., was set to receive more than $312 million. That's according to a Connected Nation tally
Several states have already signed contracts with one or both of the satellite companies, and many more are negotiating the terms of those agreements, which will now in some cases be for less money than the companies anticipated.
One official noted that some locations marked as served on the FCC’s map were considered eligible for BEAD funding after states’ challenge processes, either because copper technology was categorically excluded or because service wasn’t actually being provided.
Those state modifications were not accounted for in NTIA’s requested removals, the official said.
The NTIA official said that states could challenge locations marked for removal if they thought the home or business did in fact need BEAD service.
Starlink currently has an estimated 2.7 million subscribers in the U.S. and reports 12 million globally. Amazon is still launching its constellation and plans to start commercial service later this year.
In June 2024 when NTIA opened the program up to satellite service, some advocates and states were concerned the satellite network wouldn’t have the capacity to provide BEAD’s minimum standard of service with a significant increase in customers. Legislators, including mostly Democrats but some Republicans, have been critical of the agency’s move away from fiber.
NTIA Administrator Arielle Roth and Commerce Secretary Howard Lutinick have insisted they were axing rules that needlessly drove up deployment costs.
They have also repeatedly said they will hold grant winners to all their obligations under the program, even after SpaceX told states it could be “untenable” for satellite operators to participate unless they were exempted from certain rules. A state official said curtailing LEO projects could also help rebut accusations of favoritism.
Although NTIA made the playing field more level, many state broadband offices preferred to go with fiber, which provides much higher speeds but costs more to deploy. If a fiber project was not exorbitantly expensive, it could still beat out a LEO project under the Trump administration’s new regime.
One official said it’s possible that LEO bids, which often blanketed entire states, were largely successful in areas that other ISPs would have avoided, like those with many sheds or barns, or where a local provider was already about to build. That could explain why LEO projects were hit hard by a newly updated FCC map.
SpaceX did not respond to a request for comment.
It’s not clear what will happen to the saved cash from the reduced awards.
NTIA is planning guidance on that “non-deployment” funding — most of the program’s budget after the Trump administration pushed down deployment costs — sometime this summer, Roth told lawmakers earlier this month.
