Colorado must redo its $826.5 million broadband plan to adhere to new federal rules

The state’s $826.5 million plan to ensure every last household in Colorado has access to affordable broadband service must redo its grant program after the federal government changed the rules.

The Colorado Broadband Office, which is overseeing the funding to build infrastructure so every unserved or underserved Coloradan has fast internet, found out Friday like the rest of the country that the original guidance to prioritize fiber-internet projects has been scrapped. They must now consider all internet technologies when it makes financial sense. That includes wireless and satellite services, like SpaceX’s Starlink, founded by Elon Musk, whose relationship with Trump imploded a day earlier.

The state was days away from submitting its recommendations to the National Telecommunications and Information Administration, said Lauren Francis, a spokesperson from the state’s Office of Information Technology. 

“A lot of work has been done on our end,” Francis said in an email. “It will take a few days for us to formulate a plan.”

So far, the amount awarded to Colorado hasn’t changed, she said.

The state’s more than $800 million federal award was higher than anticipated when it was announced two years ago. Funding came from the infrastructure bill that Congress passed in 2021. The bill set aside $42.5 billion for the Broadband Equity, Access and Deployment Program, known as BEAD. Every state received $100 million to improve broadband access, while the rest would be awarded later based on states’ proposals (here’s a breakdown of the awards by state).

At the time, the state’s broadband office found that about 10% of Coloradans, or about 190,000 households, didn’t have internet speeds of at least 100 mbps down and 20 mbps up. The office moved fast and became one of the first states to get its BEAD plans approved last year, one year ago tomorrow. 

Satellite internet companies were always allowed to apply for funding as long as their service had download speeds of at least 100 megabits per second, and 20 mbps up. But fiber internet was prioritized because fiber is considered more reliable, more future proof and much faster. It also means more local jobs — the state’s plan estimated 3,000 new jobs as part of the BEAD rollout. That may not be the case for satellite services that already have satellites beaming the internet to earth.

Being technology neutral isn’t looking out for American consumers, especially in rural areas, said Drew Garner, director of policy engagement at the Benton Institute for Broadband & Society, which has advocated in favor of fast, affordable internet for U.S. households.

“Every state must rerun their grant process but this time, the rules are to pick the cheapest technology, and cheap meaning in terms of the lowest grants, not cheap to the consumer,” Garner said. “And ‘cheapest’ is the word Secretary Lutnick used.”

That’s Howard Lutnick, the U.S. Secretary of Commerce who used terms like “lowest price” when he testified before a congressional panel Thursday. Lutnick said some proposals were too costly, mentioning one that cost $100,000 to run fiber to a single house appraised at $100,000. 

“We’re ending this nonsense,” Lutnick said on X. “Every BEAD dollar will be deployed this year, but we will be technology-agnostic: fiber, fixed-wireless and satellite. We will give taxpayers the benefit of the bargain and get people online quickly. This administration will deliver results. Watch.”

He also introduced the new rules a day after a surreal exchange on social media seemed to indicate the end of an amicable relationship between Musk and Trump. 

Satellite internet providers like Starlink have already invested in the infrastructure, with Starlink alone having sent up more than 7,500 satellites and counting, according to a report from news site Space.com. And Colorado, according to Starlink’s availability page, is fully covered with download speeds between 186 and 326 mbps. Upload speeds are about 90% slower.  Prices start at $80 a month and customers must pay for the equipment up front, which is $326 when no promotions are running.

“But ultimately, the service is going to be slower, less reliable and more expensive to the consumer. It’s not necessarily going to support future needs like AI. And it simply doesn’t work in some areas that are particularly mountainous or forested areas where (service) can’t penetrate so the household just can’t use it,” Garner said. “That’s going to hurt the economic competitiveness and development of these rural areas. … What Secretary Lutnick is doing right now is pinching pennies on critical technology.”

Lower cost, non-fiber options

According to Peter Holslin, managing editor at Reviews.org, satellite internet service is the most available technology in Colorado at 99% and higher than cable internet. Another wireless option, 5G service from companies like T-Mobile is at 50%, slightly higher than fiber.

Holslin said thanks to Starlink, satellite service has improved in speeds and coverage, as well as encouraging others to jump in. Amazon’s Project Kuiper is working on sending 3,200 satellites to space and providing wireless broadband service. 

“Five years ago, people weren’t thinking, ‘Oh man, I’m unhappy with my cable internet provider. I think I’m going to get satellite internet instead.’ That wasn’t a thing but I’ve heard more and more people seriously considering Starlink as an internet option even if you’re not in a rural or very remote area,” Holslin said. 

But those users prefer portability, RV’ing or living out of their van. “Fiber internet is by far the best internet that people should get,” he said.

There’s other wireless options, too. Mobile wireless or fixed-wireless systems may not be as fast but are a fraction of the cost of building fiber. In places where it’s just too costly to run a stretch of fiber to connect a single house, wireless is also an option for BEAD applicants.

Brian Worthen, CEO of Visionary Broadband, said his company applied for about a dozen projects on the Western Slope in Colorado’s BEAD program and used a hybrid approach of fiber and fixed wireless, a technology that installs strategically placed towers in areas that beam the internet right to an antenna installed at the user’s home.  

He planned to install multiple towers in areas where it’s more difficult and costly to put fiber in the ground. But wireless still requires workers, equipment and an investment.

“We spent time, as did other providers, on this for a year and a half to put together the best applications possible. The state was about ready to bless those and now this is reset because we have to run another round,” Worthen said. “In the meantime, we’ve got dollars out on staff and contractors, mapping and putting together these bids and what not. This takes us away from just naturally going out and building the quote-unquote easier areas of Colorado.”

That was actually a big point of the program. The federal and state governments have helped subsidize telecom service for decades in areas where private companies couldn’t get a financial return because of the limited number of potential customers. The BEAD allocation would have been enough to get to all households in the state so even those who didn’t want it today could access it in the future.

“The guidance from NTIA removes nearly all fiber preference and puts satellite in the driver’s seat,” said Worthen, who lost the earlier Rural Digital Opportunity Fund competition run by the Federal Communications Commission to Starlink. Starlink was later excluded from RDOF.

Other rule changes

The state’s Broadband Office is still analyzing the changes. Another change to the rules is that while all applicants must offer a lower-priced plan for customers, states can’t set the price. Colorado’s low-price fiber service was between $30 to $50, though many other states set the minimum cost much higher, according to an analysis by the Pew Charitable Trust.

Also new, Francis added, was that states can now consider households that were supposed to get faster internet under older federal programs like the Rural Digital Opportunity Fund but never did because the companies defaulted on the project.

The state already went through two rounds of applicants that involved more than 50 submissions. Having to figure out which locations are now eligible or ineligible and putting companies through the application process once again will be especially challenging because the NTIC put a 90-day deadline, which delays the process to approximately Sept. 4.

“We just want to make sure that our stakeholders know that we know how much work went into this,” she said. But the office won’t know what the new need looks like until the federal government shares the updated information.