en.Wedoany.com Reported - The National Telecommunications and Information Administration (NTIA) has asked states to remove up to half of the locations awarded to satellite internet service providers under the Broadband Equity, Access, and Deployment (BEAD) program. According to several state officials familiar with the situation, satellites account for about 20% of the program's 3.9 million locations, and the affected recipients were originally slated to receive over $1 billion in funding—both figures will be reduced.

The NTIA sent states a list of locations marked for removal last week. Officials stated that these locations are no longer eligible for funding because, according to the latest broadband coverage map released by the Federal Communications Commission (FCC) this month, they either fall under non-broadband-needing building types such as sheds or barns, or are already covered by terrestrial internet service providers. This adjustment is almost entirely targeted at Low Earth Orbit (LEO) satellite providers, with about half of LEO locations in multiple states deemed ineligible, though the specific number varies by state. NTIA officials did not provide a nationwide total of affected locations.

NTIA officials explained that satellite locations were marked for removal because the program pays for capacity reservation fees for satellite participants rather than physical network construction, and LEO projects, which are location-based, allow for flexible adjustments. This move stems from an FAQ updated by the NTIA in May, which noted that LEO recipients "may not be reimbursed for ineligible locations." The official stated that LEO funding may be modified in the future, and the agency will continue to monitor FCC map changes. The FCC broadband coverage map is updated every six months, with the ninth version released last week; the NTIA previously used the sixth version.

The Trump administration modified the bidding rules for the $42.45 billion BEAD program last year, making it easier for satellite providers to compete for funding. According to state spending plans approved by the NTIA, over 735,000 locations nationwide will receive LEO broadband services through the program, a figure that excludes California and Illinois. In all states' draft spending plans (slightly modified before NTIA approval), SpaceX will receive nearly $739 million, and Amazon Leo will receive over $312 million, according to statistics from Connected Nation. Some states have signed contracts with one or both satellite companies, and some agreement amounts will now be lower than expected.

Doug Adams, head of broadband marketing firm Broadband Marketers, wrote on Broadband.io: "Losing half of them either means about 365,000 households won't be connected... or it's just a harsh look at the structure of the earlier version." Currently, Starlink has about 2.7 million users in the U.S. and reports 12 million globally. Amazon is still launching its satellite constellation, planning to begin commercial service later this year. When the NTIA opened the program to satellite services in June 2024, some advocates and states worried that satellite networks might not have the capacity to meet BEAD's minimum service standards. Lawmakers, including most Democrats but also some Republicans, criticized the agency for moving away from fiber optics.

NTIA Director Arielle Roth and Commerce Secretary Howard Lutnick have insisted they are eliminating rules that unnecessarily drive up deployment costs, and have repeatedly stated that recipients will be required to fulfill all obligations under the program. A state official said that scaling back the LEO program also helps counter allegations of favoritism. Although the NTIA has made the competitive environment fairer, many state broadband offices still prefer fiber optics, which are faster but more costly to deploy. If fiber project costs are not excessively high, they may still beat LEO projects under the new Trump administration framework.

One official noted that LEO bids often cover entire states and may achieve greater success in areas where fiber projects are too costly or conditions are complex (such as areas with many sheds or barns, or where local providers are about to build), which could explain why they are heavily impacted by the new FCC map. SpaceX did not respond to a request for comment. Regarding the use of funds saved from the funding cuts, the NTIA plans to issue guidance on "non-deployment" funds this summer. If a state believes a residence or business truly needs BEAD service, it can challenge the locations marked for removal.