With up to $21 billion in Broadband Equity, Access, and Deployment (BEAD) funding expected to go unspent, Commerce Secretary Howard Lutnick said Tuesday that states will decide how the money is ultimately used – and can walk away from SpaceX if it doesn’t comply with requirements.
Speaking before the Senate Commerce Appropriations panel, Lutnick said that nearly $21 billion will be left over from appropriated BEAD funds once all final proposals are approved.
The $42.45 billion Broadband Equity, Access, and Deployment BEAD program was created as part of the Bipartisan Infrastructure Law to provide broadband access grants to underserved or unserved communities across America.
As of Monday, 50 out of 56 final proposals submitted by states and U.S. territories have been approved, with two others expected to be finalized by Wednesday, Lutnick said.
While that $21 billion has been touted as major taxpayer savings by Commerce, those plans have left ambiguity on how exactly the department plans to use unspent funds, Sen. Jerry Moran, R-Kan., who serves as the subcommittee chair, said during opening remarks.
“The resulting final B plan, submitted by many states, saw drastic reduction in BEAD fund requests,” Moran said, explaining that Kansas initially secured $452 million in its initial BEAD allocation request, but that number decreased to $166.6 million.
“This uncertainty has caused concern among state broadband offices who are unable to plan broadband initiatives that rely on the balance of their BEAD allocations,” Moran continued, adding that he’s “concerned that the worthwhile goal of maximizing the impact of taxpayer dollars has prioritized achieving the lowest cost rather than the best value for BEAD projects.”
Lutnick committed to spending those leftover funds and said that Commerce will hold listening sessions to determine how to spend that money on broadband deployment. He also assured Moran that the department will not return leftover funds to the Treasury Department.
“We are going to spend that money, that money you have appropriated, and we’re going to use the best ideas,” Lutnick said.
Sen. Jeanne Shaheen, D-N.H., asked how approved BEAD plans could be impacted if states are forced to use a different satellite provider after SpaceX – owned by former White House Senior Advisor Elon Musk – requested that states sign a “contract rider” circulated by the company last month.
That document outlined a “set of demands that would ensure Starlink receives federal grant money, even when residents don’t purchase Starlink broadband service,” according to Shaheen.
“The demands would also guarantee that SpaceX gets paid even if it doesn’t reserve large portions of Starlink network capacity for homes in the areas that are supposed to receive BEAD funded internet service,” she added.
Lutnick responded that “It is my understanding that SpaceX, as you correctly say, sent you a rider, and they sent [it to] a number of states. That rider is outside of our guidelines, is outside the statute, and it is rejected by us. There will be no rider.”
In response to a question from Shaheen, Lutnick added that states could swap out SpaceX after a BEAD plan has been approved.
“If SpaceX does not want to live without the rider, then you will definitely go find an alternative means of execution so you can deliver broadband to each and every one of the people in your state as you are entitled to and as we will deliver,” Lutnick said, adding, “we are on the same side.”