SpaceX and Amazon are poised to capture roughly 4% of the nearly $20 billion earmarked by states for rural broadband infrastructure projects. This translates to approximately 21% of the locations targeted under the federal BEAD (Broadband Equity, Access, and Deployment) program.
California recently released its final BEAD proposal, valued at $1.57 billion, which is currently undergoing a seven-day public comment period ending on December 9, according to Bruno Marin, an analyst at New Street Research. The proposal requires approval from the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA).
Despite not yet having an operational network, Amazon is slated to receive 6% of the funding and cover 27% of BEAD locations in California. This surpasses SpaceX, which is allocated 14% of the funding and 4% of the locations in the state it previously called home. The New Street Research analysis indicates that fiber optic technology remains the preferred choice in California, mirroring the trend in 40 out of the 54 states and territories seeking BEAD funding.
Nationwide, fiber optic providers such as Comcast and AT&T have secured 86% of the funding and 65% of the locations. Nevertheless, the analysis highlights that SpaceX and Amazon have been awarded more locations than any individual wired operator, with approximately 464,000 and 410,000 locations, respectively.
SpaceX has previously voiced concerns regarding state decisions that prioritized terrestrial technologies over satellites, after NTIA indicated in June it would apply a technology-neutral approach for the $42.5 billion program. The unallocated $21 billion for broadband infrastructure has created tension between NTIA and states, who desire the flexibility to redirect the funds to other priorities. Arielle Roth, Assistant Secretary of Commerce for Communications and Information, stated on December 2nd that NTIA would share details on the usage of leftover funds early next year. "Our approach to the BEAD savings will complement the program and reflect the same principles that made the reforms successful," she said. "We haven’t made any decisions yet but stay tuned.”
Roth emphasized the "huge diversity in state technology mixes" for BEAD funding, noting that "states like Rhode Island leaning more on fiber, others like Nebraska leaning more on fixed wireless, and some like Montana leaning more on satellite."
NTIA has already approved proposals from 29 states and territories, aiming to "approve as many states as possible by year’s end."
New Street Research estimates that SpaceX's broadband deployment across 45 states will cost around $1.24 billion, with 52% covered by government funding. The buildout cost for Amazon's Project Kuiper across 27 states is estimated at $574 million, with 60% government support.
Vikash Harlalka, director at New Street Research, noted requirements around reserved capacity and free user terminals. "Similar to SpaceX, we aren’t sure where [Amazon] will be investing these funds,” he said, adding that the company is likely "being more aggressive with its bids than SpaceX to win more locations.”