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Donald Trump’s commerce secretary touted Elon Musk’s Starlink to federal officials in charge of a $42bn rural broadband programme, raising new questions about the billionaire White House adviser’s conflicts of interest.
In a private meeting in the Herbert Hoover building near the White House this month, Howard Lutnick told civil servants at the Broadband Equity, Access, and Deployment (Bead) programme to increase the project’s use of satellite connectivity — over fibre-optic cable — and singled out Musk’s provider, Starlink.
“He mentioned Musk by name, he asked if we had been talking with Elon,” Evan Feinman, who until Friday was the director of Bead, told the Financial Times in an interview.
“The clear thrust of his directive was to increase the amount of satellite being used regardless of any other considerations,” Feinman added.
The conversation is the latest example of how Musk, who gave over $250mn to Trump’s 2024 presidential campaign, could benefit from his influential role.
The White House recently installed Starlink in its own grounds to improve WiFi connectivity, spokeswoman Karoline Leavitt recently told The New York Times.
Republicans have long criticised Bead — part of Lutnick’s commerce department — over what they claim are burdensome rules that have hampered the broadband rollout to remote communities. Musk, who now oversees a White House cost-cutting initiative, last year called the programme an “outrageous waste of taxpayer money”.
Lutnick, a Musk ally, this month blamed “woke mandates [and] favouritism towards certain technologies” for the delays, adding that his department was “revamping” Bead to take a “tech-neutral approach”.
A Trump administration official pushed back on any “implicit notion” that Lutnick changed the programme to favour Starlink or any other company.
“Bead . . . didn’t make a dent in expanding rural broadband,” said the official. “This administration — which was elected with resounding support from rural Americans — is committed to actually delivering on this initiative that the Biden administration totally dropped the ball on.”
Musk and Starlink did not immediately respond to requests for comment.
For all but the most remote communities, satellite connectivity was neither cost-effective or durable, Feinman said.
“Fibre-optic cable remains operable for decades and decades at extraordinarily low maintenance and operation costs, and offers speeds today that can meet all current needs and likely those of the future,” Feinman said. “Starlink simply can’t.”
The Wall Street Journal reported this month that Lutnick’s planned overhaul of Bead could lead to Starlink winning up to $20bn in contracts — roughly five times the amount it was expected to receive under Bead’s current set-up.
Debbie Dingell, a Michigan Democratic lawmaker, has labelled the moves “a blatant conflict of interest”.
“I am concerned that the Trump administration . . . [is pushing] changes that would directly benefit Elon Musk by funnelling billions of taxpayer dollars to his Starlink service,” she told a congressional hearing this month.
Starlink is available across the US for a cost of about $120 a month, making it far more costly than fibre-optic broadband. The service can also slow down in areas with many users.
Lutnick’s plans to overhaul Bead could complicate the rollout of broadband in three states with most advanced plans for finally providing service to rural communities: Louisiana, Nevada and Delaware. None has chosen Starlink so far, instead favouring Verizon and Comcast, Amazon’s Kuiper and local companies.
“Delaware is awaiting specific guidance from the Department of Commerce,” a state spokesperson said.
Louisiana is already planning to use fibre for 95 per cent of its locations. In January, state official Veneeth Iyengar said that they “fully expect” to break ground on projects in the next 100 days.
“We’re ready to work with the administration on significant process improvements to put shovels in the ground,” Iyengar told the FT on Tuesday.
Feinman said the increased use of Starlink would be a distraction from the programme’s important mission.
“Musk, when Tesla opens up a facility, doesn’t put it on Starlink, he gets fibre,” he said. “You need fibre in your town to have an economic future.”
