Elon Musk Reignites Feud with Biden Administration Over Internet Investments

By: Alex Trent | Published: Jan 26, 2024

President Biden’s move toward improving internet connections in North Carolina rural zones without SpaceX has sparked criticism from tech billionaire Elon Musk.

The FCC had previously offered Elon Musk-owned company SpaceX a deal to provide this internet coverage to U.S. citizens. This deal was later revoked in 2022. The decision to reject Starlink drew criticism online, with concerns that the math on the decision didn’t add up.

Biden’s Announcement

Joe Biden announced on the social media platform X, owned by Elon Musk, that his administration is investing $82 million into fiber-optic cable to provide high-speed internet to 16,000 homes in rural North Carolina.

Joe Biden announcing the investment into high-speed internet.

Source: Joe Biden/X

“This is just one piece of a much bigger story,” Biden wrote. “Under my leadership, over 40,000 infrastructure projects have been announced across our nation.”


Response by Brendan Carr

In response to Biden’s post, Commissioner of the Federal Communications Commission, Brendan Carr, decried the decision.

Brendan Carr breaking down the price difference between Biden’s decision.

Source: Brendan Carr/X

“In 2020, the FCC secured a commitment from Starlink to offer high-speed internet in rural areas for $1,377 per location in support,” he wrote in an X post. “The Biden administration rescinded that deal, and is now spending $5,125 per location.”

Elon Jumps In

Elon Musk responded to Brendan Carr’s pronouncement that the Biden administration was making a mistake. In agreement with Carr, Elon declared, “Exactly! This is insane,” in an X post.

Elon Musk responding to Brendan Carr on X

Source: Elon Musk/X

While Musk’s response was toward the cost analysis put forward by Carr, it’s hard to imagine he also wasn’t expressing his frustration about his own company, SpaceX, missing out on the contract.

Musk’s Lost Subsidy

SpaceX recently lost a contract with the United States government worth almost $900 million.

A Space X factory in California.

Source: Steve Jurvetson/Wikimedia

Previously the company was enjoying an $888.5 million subsidy for its satellite internet service Starlink to be installed in rural areas across the country. The U.S. Federal Communications Commission (FCC) cited a failure of Starlink to meet certain program requirements. It also accused Starlink of being unable to demonstrate its ability to deliver on its promise to complete the project.

What Is Starlink?

SpaceX’s Starlink is a satellite internet service capable of providing high-speed internet anywhere on the planet and currently provides for 71 countries.

A Starlink satellite above the Earth.

Source: Botnet Sky/Wikimedia

The company plans to continue expanding coverage to as many people as possible. In some areas of the world, Starlink is currently the only way to get access to high-speed internet. SpaceX refers to Starlink as a “constellation,” otherwise known as an interlinked network of orbital satellites.


Previous Sparring Between Musk and Biden

Elon Musk and U.S. President Joe Biden have a recent history of sparring back and forth since Biden assumed the presidency in 2020.

Elon Musk speaking into a microphone.

Source: Tesla Owners Club Belgium/Wikimedia

In the past, Biden has said that Musk’s connections with other countries are “worthy of being looked at.” He has accused Elon of spewing lies across social media. For his part, Elon has been an outspoken critic of Biden, accusing him of being someone who just reads off a teleprompter and fails to get anything done.


Biden Administration Plans for Rural Internet

The Biden announcement only covered the installation of internet cable in parts of rural North Carolina. This means that the rest of the country is still waiting for a solution for high-speed internet.

Presidential candidate Joe Biden speaking in 2019.

Source: Michael Stokes/Wikimedia

When Biden spoke at a fundraising event, he promised that the fiber-optic cable would be manufactured in Virginia as well. The goal is to help bring some manufacturing work to the state and help boost the economy.


Need for High-speed Internet

Despite the majority of Americans having access to some form of internet, the need for high-speed internet is still significant.

Cables connected to an Internet modem.

Source: Pixabay/Pexels

Forbes reported in 2023 that 42 million Americans still don’t have access to broadband internet speed. A broadband connection is defined by the FCC as a connection with a download speed of at least 25 megabits per second (Mbps) and an upload speed of 3 Mbps.


Why Is High-speed Internet Important?

The demands of modern life increasingly demand a stable and quick internet connection.

A laptop with a web browser set to Google.

Source: Ciao/Pexels

A quicker connection allows for higher work productivity and is critical for memory-demanding content like video streaming. Without a good internet infrastructure, a user might find themselves with constant connection interruptions that make work and daily life more difficult.


Greenlight to Go After Musk

Even though the FCC made the final decision to reject the SpaceX deal, Brendan Carr alleges that it only happened after Biden “gave federal agencies a green light to go after” Elon Musk. Carr, in his role as commissioner, wrote a dissent to the FCC decision to reject SpaceX’s application for the internet installation subsidy.

Elon Musk sitting in a chair with one leg crossed.

Source: Trevor Cokley/Wikimedia

“Extending high-speed fiber lines to these same areas will likely cost somewhere in the neighborhood of $3 billion based on past bidding patterns and analysis,” he wrote.


Biden’s View on High-speed Internet

During a recent stump speech in North Carolina, Biden made comments that emphasized the importance of broadband access.

President Biden signing a document at his desk.

Source: The White House/Wikimedia

“It’s just as essential today as electricity was a century ago,” he said (via The Daily News). “High-speed internet isn’t a luxury anymore. It’s an absolute necessity.” His administration hopes to provide 300,000 North Carolina residents with high-speed access by the close of 2026.