Musk's Role in Trump White House Raises Questions Over Possible BEAD Changes
SpaceX CEO Elon Musk could be a big beneficiary of Donald Trump's election, with some seeing his SpaceX reaping rewards from changes to NTIA's broadband equity, access and deployment (BEAD) program and the next FCC offering a warmer reception to SpaceX requests. Yet government ethics experts believe Musk and his businesses could face a particularly big challenge if he becomes leader of a government efficiency effort, as Trump promised during the campaign. "He's like a walking potential conflict of interest," said Virginia Canter, chief ethics counsel for Citizens for Responsibility and Ethics in Washington (CREW).
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Trump and Musk spoke broadly on the campaign trail about reducing bureaucracy and regulation, indicating that will become a general theme of the Trump White House, said Mark Jamison, American Enterprise Institute nonresident senior fellow. The Trump administration could pursue changes to BEAD that would benefit SpaceX's Starlink satellite broadband service, as the administration is likely to be more open to it as a solution for connectivity to some areas, he added.
Summit Ridge Group’s Armand Musey, in an email, said a Trump FCC is more likely to change its position on Starlink’s ineligibility for rural deployment opportunity fund awards. BEAD also could reduce its fiber bias, with more willingness to allow satellite providers to cover particularly expensive areas, he said. Musey added the next FCC will likely be quicker about approving larger numbers of Starlinks and could be more amenable to SpaceX efforts to increase power levels for non-geostationary orbit satellites.
New Street Research's Blair Levin, in a series of notes in October, said that Trump and many congressional Republicans will want to see the FCC and NTIA be very pro-Musk. That could result in BEAD's fiber preference ending and a door opening for greater SpaceX participation, Levin said. In addition, Musk could use his influence for a comprehensive FCC review of what constitutes an available service under the USF, or even an end to USF, as that could drive up demand for SpaceX's Starlink service, particularly in rural areas. SpaceX also stands a better chance of prevailing in its various proceedings before the FCC, he predicted.
Several communications lobbyists and a former FCC official told us FCC Commissioner Brendan Carr’s good relationship with Musk is partly why the Republican commissioner is an overwhelming favorite to become chairman when Trump returns to office Jan. 20 (see 2411060042).
If formally appointed to a government-efficiency role, Musk would face "a spaghetti bowl" of connected and overlapping ethics and conflict-of-interest rules and requirements that could prompt recusal or divestitures, said Scott Amey, general counsel-Project on Government Oversight. If Musk served as a member of an advisory committee, then he wouldn't necessarily face the same divestiture requirements but could have to recuse or disqualify himself from policy creation that could overlap his business interests, Amey said. However, as an informal adviser to the president, Musk could escape these limitations, he added.
The guardrails around Musk's role would probably come from the Office of Government Ethics and/or the ethics offices of agencies he deals with, such as the White House general counsel's office, Amey said. Given Musk's varied business interests, counsel ethics opinions regarding potential conflicts of interest would be fairly long, Amey said.
Serving as special government employee on a commission would give Musk the opportunity for waivers regarding issues like his employment status or stock holdings, CREW's Canter told us. An informal "kitchen cabinet" adviser who isn't directing public employees wouldn't be subject to conflict of interest laws, she said. But people can become de facto government employees if they get treated as supervisors and represent themselves in meetings as someone speaking on behalf of the president, she said.