Despite federal mandates for technology neutrality, satellite operators are on track to receive a fraction of the U.S. government’s massive rural broadband subsidy package, with fiber optics dominating the awards.
According to a December 5 research note from New Street Research, satellite providers—including SpaceX’s Starlink and Amazon’s Project Kuiper—are projected to capture only 4% of the roughly $20 billion in Broadband Equity, Access, and Deployment (BEAD) funds allocated to date. Analysts Bruno Marin and Vikash Harlalka estimate that while the program’s total distribution will eventually reach $42.45 billion, the current trajectory heavily favors terrestrial fiber, which has secured approximately 86% of the funding.
Financial Projections and Split
The New Street Research modeling provides a stark contrast between the funding for wired versus orbital infrastructure:
- SpaceX: Projected to secure approximately $1.24 billion (roughly 6% of the total satellite-eligible funds) over the program’s lifecycle.
- Amazon Project Kuiper: Along with other smaller satellite entities, Amazon is estimated to receive a combined $300 million.
- Fiber Optics: Dominating the landscape with 86% of allocated funds, equating to billions in awards for traditional ISPs like AT&T and regional cooperatives.
California: The Final Battleground
The disparity is evident in California, the last state to release its funding proposal. On December 2, the California Public Utilities Commission (CPUC) unveiled its draft resolution for the state’s $1.86 billion allocation. The plan, currently in a seven-day public comment period ending December 9, allocates funds to connect unserved locations but heavily favors Amazon’s unproven constellation over the operational Starlink network in terms of total locations awarded.
- Amazon Project Kuiper: Provisionally awarded $101 million to serve approximately 92,000 locations.
- SpaceX Starlink: Provisionally awarded $63 million to serve approximately 46,000 locations.
- Fiber Competitors: By contrast, AT&T alone is slated to receive over $331 million in the state, while GeoLinks secured nearly $180 million.
“Reliable Broadband” Mandate
The lopsided allocation stems from the National Telecommunications and Information Administration’s (NTIA) definition of “reliable broadband,” which prioritizes fiber-optic cable for its longevity and speed. Speaking on December 2 regarding the finalization of state proposals, NTIA officials noted that “leftover funds” from the initial allocations might be repurposed, but the primary focus remains on wired infrastructure.
Regulators have argued that while Low Earth Orbit (LEO) satellites offer speed, fiber provides a more “future-proof” investment for taxpayer dollars. However, the decision to award nearly double the California locations to Amazon’s Kuiper—which has yet to launch commercial service—over SpaceX’s active constellation has drawn industry scrutiny regarding the criteria for “proven” technology.
Next Steps
The CPUC will accept public comments on the California draft resolution until December 9, 2025. Following the comment period, the state will submit its final plan to the NTIA for certification, locking in the grant awards for the fiscal year.
