According to Bloomberg, the Trump administration is making adjustments to a $42 billion broadband subsidy program that will benefit satellite Internet providers such as Elon Musk’s Starlink. However, some state and federal officials are concerned that satellite Internet technology cannot provide reliable Internet connectivity to the American people at scale and at low cost.


Starlink terminalPreviously, the Biden administration formulated the Broadband Equity and Access Deployment (BEAD) plan, hoping to provide every American household with fast and reliable home Internet services. The plan relies heavily on fiber optic lines, which are expensive to install but can last for decades. However, after Trump took office, Musk vigorously lobbied the U.S. government to switch to satellite networks and won support from Republicans, including Ted Cruz, chairman of the Senate Commerce Committee.

However, some state officials and former federal officials spoke to Bloomberg on condition of anonymity and revealed that there are problems with U.S. Commerce Secretary Lutnick’s new policy to promote satellite networks. While satellite networks are initially cheap, they are more expensive in the long term. Internal data shared by a state official shows satellite service will cost consumers 53% more over 30 years and maintenance costs will more than double.

“The differences between these technologies don’t seem to be clearly understood yet, nor are the long-term consequences of choosing one technology over another.” Evan Feinman, the former head of broadband projects during the Biden administration. He left the Commerce Department this month.

According to an analysis shared by an anonymous state broadband official, fiber-to-home installation costs would be at least $1,500 per household. However, this cost can vary significantly depending on factors such as the location of the resident and the availability of surrounding infrastructure. Texas estimates that installing fiber to each home costs about $10,000.

By comparison, Starlink offers a standard home kit for about $600, a cost that can fluctuate. However, according to the state's analysis, Starlink's satellites need to be replaced every five years, significantly increasing the long-term cost of satellite service. The analysis also showed that the overall cost of fiber optic service to 250,000 homes over 30 years would be approximately $4 billion less than satellite service, which would be a savings of $15,600 per home.

The U.S. government's broadband plan to switch to satellite services will bring more profits to Starlink. The Wall Street Journal reported that under the current BEAD plan, Starlink is expected to receive US$4.1 billion in broadband subsidy funds. If the Trump administration switches to satellite services, Starlink may receive US$10 billion to US$20 billion in subsidy funds.

In addition to Starlink, Amazon and OneWeb are also providing or planning to provide satellite Internet services. As of press time, SpaceX, Amazon and OneWeb have not commented on this.