The Texas Broadband Development Office has put a temporary hold on all disbursements from a multibillion-dollar federal broadband program as lawmakers scrutinize how the state awarded the money and whether Elon Musk’s Starlink received favorable treatment.
The hold on Broadband Equity, Access and Deployment program funds, known as BEAD, took effect Monday and will remain in place “until further notice,” according to an email obtained by The Texas Tribune and sent to subgrantees.
The BDO did not provide a reason for the pause.
“No further action is required from subgrantees at this time,” the office said in the email. “The BDO will provide additional guidance and updates as they become available.”
The move comes less than a week after Comptroller Don Huffines announced a comprehensive internal review of his office, which includes the Broadband Development Office. Lt. Gov. Dan Patrick and House Speaker Dustin Burrows have separately called for an audit over concerns about how more than $3 billion in BEAD funding was awarded.
Questions about the program spilled into public view during a Senate committee hearing in June, when lawmakers pressed BDO officials over how grants were structured and why low-Earth orbit satellite companies were given different payment terms.
Sen. Charles Schwertner, R-Georgetown, said his office had heard concerns about the handling of taxpayer money, including the amount companies could receive before completing their projects.
Other broadband providers were expected to receive 10% of their grant money up front, with the remainder paid through a tiered system as work progressed. That arrangement was changed for low-Earth orbit satellite providers.
During the hearing, BDO Director Bryant Clayton said the change came at the direction of Gov. Greg Abbott’s office just days before the grant was awarded.
Schwertner made clear he wanted more transparency from the agency.
“I have my eye on y’all regarding the way y’all are conducting your business,” Schwertner told Clayton. “I don’t care who’s messing with your business, but we, as an oversight committee, are going to oversee it regarding fairness and transparency.”
Starlink is the largest provider of residential broadband service through low-Earth orbit satellites in Texas and has at least 12 million customers worldwide. Amazon has also begun deploying satellites for its own LEO broadband service. Both companies were selected as subgrantees by the Texas broadband office.
The questions surrounding the awards have since widened beyond the Senate hearing.
Sen. Nathan Johnson, a Dallas Democrat running for Texas attorney general, raised the possibility that problems with the process could extend from Washington to Austin.
“Without drawing conclusions for the moment, the whole process may have involved coordinated corruption among the Trump administration, the illegally empowered DOGE czar Musk, private entities (Starlink), the governor’s office and the broadband development office,” Johnson said in a campaign statement.
Patrick and Burrows have not made similar accusations, but the Republican leaders said concerns raised about the BEAD award process warranted an audit. They also said the Legislature would take action during its next session, which begins in January.
The dispute took another turn during Kelly Hancock’s final days as acting comptroller.
Hancock responded to the allegations by accusing Amazon of “aggressively” lobbying state lawmakers, including members of the Senate committee examining the broadband program. He also said Texans should not serve as a financial safety net for multibillion-dollar companies.
Hancock’s statement did not mention Musk or Starlink, despite the company being at the center of questions about the payment structure.
That drew a sharp response from Schwertner.
“It’s good to see new incoming leadership in the comptroller’s office after the failed election and tenure of the current interim comptroller,” Schwertner wrote on X. “No tantrum on the way out of the office will change that.”
Huffines has since taken over the comptroller’s office and announced the internal review.
The BEAD program was created to expand high-speed internet access, particularly in communities where reliable broadband remains unavailable or inadequate. With billions of federal dollars at stake in Texas alone, the program represents one of the largest efforts to expand broadband infrastructure across the state.
Now, at least temporarily, the money has stopped moving.
It remains unclear whether the BDO’s decision to halt disbursements is directly connected to the internal review, the legislative audit or the questions raised about Starlink. The agency gave subgrantees no explanation for the hold beyond saying additional guidance would be provided.
There is also no announced completion date for the audit.
