Earlier it became known that the Administration of US President Donald Trump plans to reform the broadband Internet development program, from which Elon Musk's Starlink could benefit. But now it has become known that US Commerce Secretary Howard Lutnick directly called on federal officials responsible for the $42 billion rural broadband expansion program to prioritize satellite communications over fiber-optic ones. In particular, he named Starlink as a key supplier, the Financial Times reports, citing its own sources.
During a private meeting at the Herbert Hoover Building in Washington, Latnick insisted on the need to increase the use of satellite technology in the Broadband Equity, Access, and Deployment (BEAD) program.
"He mentioned Musk by name, he asked if we had been talking with Elon," Evan Fineman, a former director of BEAD, told the Financial Times. "The clear thrust of his directive was to increase the amount of satellite being used regardless of any other considerations," he added.
Lutnick's decision raises concerns about a conflict of interest, as Musk is a top donor to the Trump administration, donating more than $250 million to his 2024 reelection campaign. Musk also leads the White House's DOGE spending optimization initiative.
According to the Wall Street Journal, changes to BEAD could direct up to $20 billion in contracts to Starlink — five times more than the company expected to receive under the previous program structure.
The BEAD program was initially aimed at expanding fiber-optic internet, which is considered the most cost-effective solution for rural areas. Unlike Starlink, fiber-optic communication has been around for decades, has a low maintenance cost, and offers much faster speeds.
"Fibre-optic cable remains operable for decades and decades at extraordinarily low maintenance and operation costs, and offers speeds today that can meet all current needs and likely those of the future," Feynman explained. "Starlink simply can’t."
Starlink currently costs $120 per month, making it significantly more expensive than fiber-optic alternatives, and its speeds may drop in regions with a large number of users.
Despite these challenges, Latnik argues that BEAD reform is necessary to remove bureaucratic barriers that he believes are holding back rural internet development. He said that "technology bias policies" have delayed the program's implementation and promised to adopt a "tech-neutral approach."