Trump administration will give Elon Musk's Starlink access to $42 billion for internet development

The administration of US President Donald Trump has announced a major reform of the $42 billion federal grant program for the development of broadband Internet, eliminating priority funding for fiber-optic networks and introducing a "technology-neutral" approach that could significantly facilitate Elon Musk's Starlink, The New York Times reports.

The decision, announced by Commerce Secretary Howard Lutnick, is a policy shift from Biden administration rules that favored fiber-optic networks in funding high-speed internet in the U.S. Latnick said the new rules would remove regulatory barriers that had hindered the expansion of internet coverage under the previous administration.

"The department is ripping out the Biden administration’s pointless requirements," Lutnick said. "We are removing regulatory and other barriers that slow down construction and connection to households."

The changes are part of the Trump administration's DOGE initiative to improve government efficiency, of which Musk is a key advisor. His company, SpaceX, which operates Starlink, provides satellite internet to nearly five million users worldwide.

The Broadband Equity, Access, and Deployment (BEAD) program was created in 2021 to provide internet access to rural and underserved areas. The Commerce Department under Biden established strict funding rules that favored fiber-optic networks, citing their higher speed and reliability.

However, Republicans and industry representatives said such restrictions unfairly excluded satellite internet, particularly Starlink, which can quickly provide coverage in remote areas without the need for extensive infrastructure.

Starlink has previously struggled to secure government funding. In 2023, the Federal Communications Commission (FCC) denied Starlink nearly $900 million in funding under a separate rural internet program, saying the company had failed to meet service standards. The decision was heavily criticized by Republicans, who accused the FCC of working against Elon Musk’s businesses.

But Musk's now active role in shaping public policy - from internet infrastructure to defense contracts - has raised concerns about potential conflicts of interest. His business empire includes Tesla (electric cars), SpaceX (rockets and satellites) and X (formerly Twitter, the social network), all of which have close ties to the US government.

Critics fear that loosening funding allocation rules could directly benefit Starlink, to the detriment of fiber-optic networks, which offer higher speeds and stability.

"Fiber broadband is widely understood to be better than other internet options — like Starlink’s satellites — because it delivers significantly faster speeds," said Drew Garner, policy director at the Benton Institute for Broadband & Society.

The Commerce Department has not yet provided details on how the updated program will distribute funds. Musk himself has not commented on the changes.

With billions of dollars yet to be distributed, the new rules could usher in a new era of internet development in the US, making Starlink a key player in the rural broadband market.