The Benton Institute for Broadband & Society reports…

In a letter to state broadband offices, Elon Musk’s SpaceX suggested that it may be “untenable” for low Earth orbit (LEO) satellite internet providers, such as Starlink, to participate in the Broadband Equity Access and Deployment (BEAD) Program unless they receive exemptions from certain contract requirements. Those exemptions, which are specified in a “contract rider” attached to the letter, would limit Starlink’s performance obligations, payment schedules, non-compliance penalties, reporting expectations, and labor and insurance standards.

SpaceX’s request highlights issues with the National Telecommunications and Information Administration’s (NTIA) reliance on LEO providers. BEAD was designed primarily to deploy terrestrial networks, which are physically located in communities, built with traditional construction methods, and are relatively easy to monitor and inspect. But, on June 6, 2025, NTIA restructured BEAD in ways that greatly increased participation by LEO providers, exacerbating the challenge of applying BEAD’s terrestrial-focused rules to LEO’s extraterrestrial networks.

SpaceX’s solution appears to be to simply exempt LEO providers from many of BEAD’s requirements. Specifically, SpaceX proposes that:

1. LEO providers should be evaluated exclusively by network performance. However, performance tests can only be considered if the LEO provider determines that the subscriber’s equipment is properly installed, and, notably, the LEO provider is not obligated to ensure proper installation. LEO providers should not be required to document that their network has “reserved capacity” exclusively for BEAD users.
2. LEO providers should not be reimbursed based on subscriber acquisition but rather should receive 50 percent payment upon certification of service availability and the remaining 50 percent quarterly over 10 years.
3. In the event of default or non-compliance, LEO providers should only be subject to the clawback of grant funds and debarment, nothing more.
4. LEO providers should not be required to provide financial reporting or documentation of grant expenses.
5. LEO providers should not be subject to BEAD’s labor or insurance requirements.
6. Starlink’s Low-Cost Service Option will cost $80 or less and be available to Lifeline-eligible households.