Under Trump, satellites could steal fiber's BEAD bonanza

It's very likely that the incoming Trump administration will smile on satellite Internet companies such as SpaceX's Starlink and Amazon's Project Kuiper. And that could have serious implications for fiber vendors like Calix and Corning, as well as fiber network operators like AT&T, Brightspeed, Altice, Windstream and others.

"Republicans will control the White House, the Senate and quite possibly the House – an alignment that will likely trigger a new approach to national communications policy in 2025," wrote Ted Hearn on Policyband on Tuesday. Hearn was the VP of cable trade association ACA Connects before starting his Policyband publication.

"The $42.45 billion BEAD program – under heavy GOP criticism for failing to fund a single broadband project in three years and for favoring fiber over other technologies – is likely to get a facelift, with more funding allocated to unlicensed fixed wireless, Elon Musk's Starlink, and Amazon's Project Kuiper once operational," Hearn continued.

Billions and billions

BEAD is the Biden administration's Broadband Equity Access and Deployment program, and it's designed to funnel $42.45 billion through US states for broadband networks in rural areas. Although satellite and fixed wireless companies may be eligible for some of the funding, Biden administration rules likely would funnel the bulk of BEAD to fiber operators and their vendors.

However, states have not yet begun issuing grants through the program, and a Trump administration may be able to affect the distribution of those state-level funds.

"If Trump wins, the BEAD program is likely to see a delay in spending (relative to a Harris win) and a reduction in expenditure for fiber (relative to a Harris win)," summarized Blair Levin, a policy adviser to New Street Research and a former high-level FCC official, in a note to investors prior to Tuesday's presidential election results.

Levin also cited Trump's recent comments that SpaceX's Starlink satellite service provides Internet connections that are "better than the wires."

Trump and Musk

SpaceX founder Elon Musk campaigned heavily for Donald Trump, and could potentially play some kind of role in his administration.

And Trump is clearly aware of Musk's businesses and priorities.

"We're spending a trillion dollars to get cables all over the country, up to upstate areas where you have two farms," Trump said recently on Joe Rogan's podcast. "And they are spending millions of dollars to have a cable. Elon can do it for nothing."

Although SpaceX is a major government contractor for rocket launches, the company's Starlink satellite Internet business has been mostly blocked from federal programs like BEAD and the FCC's Rural Digital Opportunity Fund (RDOF). Instead, the Biden administration has favored funding fiber-based Internet services.

That may change when Trump fills leadership positions at the FCC (which administers RDOF) and the NTIA (which administers BEAD). 

For example, FCC Commissioner Brendan Carr is widely expected to be Trump's nominee to head the agency, and he's been outspoken in his support for Starlink. Carr recently told Politico that "it would be fair to get [Starlink] back" into the FCC's RDOF program. He also suggested that up to a third of BEAD's $42.45 billion could be used for satellite Internet.

Delays and shifts

BEAD is perhaps the biggest injection of federal funding into the US telecom industry ever. But it has been plagued with delays.

Companies interested in the program initially hoped to begin receiving funds last year. Now, many don't expect BEAD funds to be available until 2026.

That appears to have scared off some big players. For example, cable company Charter Communications – a major RDOF participant – recently said it doesn't expect to pursue BEAD funding in a big way.

Other companies though are banking on BEAD. For example, Corning's CEO cited BEAD as a major catalyst for the fiber cabling supplier, starting in the second half of next year. And many smaller, regional fiber network operators – such as Windstream, Brightspeed, Altice USA and others – have signaled an interest in pursuing BEAD grants.

The financial analysts at New Street Research last year estimated that BEAD could boost the enterprise value of companies like AT&T, Consolidated Communications, Frontier Communications, Lumen Technologies and Verizon by a combined $17 billion, or 7%.

Now, though, Trump could upend those calculations.