A federal judge in July issued a mixed ruling on the Digital Equity Act, halting President Donald Trump’s attempt to cancel the multibillion-dollar grant program while striking down its use of race as a funding criterion. U.S. District Judge John D. Bates wrote a 35-page opinion that split the difference between the administration’s constitutional arguments and the intent of Congress. The decision leaves rural communities and digital inclusion groups in a state of waiting, with funds on hold and new applications delayed until December.
Angela Siefer, executive director of the National Digital Inclusion Alliance, described the outcome as “definitely disappointing.” Her organization filed suit last year after missing out on a nearly $26 million award meant to bolster internet skills nationwide. “With this administration it’s really worrisome,” Siefer said. The lawsuit was one of several challenges that forced the government to pause operations, creating uncertainty for groups that rely on these funds to teach basic digital literacy.
Legal Conflict Over Racial Classifications
Congress passed the $2.75 billion Digital Equity Act in 2021 as part of a broader “Internet for All” initiative. The law included specific provisions to benefit low-income households, rural Americans, and members of racial or ethnic minority groups. Trump attacked the act early in his second term, calling it “illegal” and pledging “no more woke handouts.” This rhetoric mirrored executive orders that characterized diversity and inclusion programs as unconstitutional.
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In court, lead federal attorney Patrick Butler argued that Congress failed to prove a compelling government interest when including the racial or ethnic criteria. Congress did not “identify anything close to” a specific instance of discrimination in the broadband industry, Butler said, according to the transcript. Butler then surprised the court, saying that if the racial or ethnic status could be severed from the law, “we would obviously apply the grant program without considering race.” In his opinion severing the race factor, Bates wrote that the court agreed that “the President lacks the power to cancel laws passed by Congress based on his bald disagreement with Congress’s policy determinations.”
Impact on Rural and Low-Income Communities
In western Ohio, Jamie Huber, director of community services at the Northwestern Ohio Community Action Commission, is scrambling to find alternative funding. Her organization acts as a subrecipient for the digital navigator programs that teach unemployed and homeless individuals how to use the internet. “How do you find a home? Well, you got to look online. And how do you find a job? You have to look online,” Huber said. The navigators also serve 10 senior centers in rural counties, helping older adults manage bills and healthcare access.
These services are critical because rural residents in counties lacking high-speed internet often live sicker and die younger than the national average. At Computer Reach in western Pennsylvania, Executive Director Dave Sevick has already cut staff and programs. The nonprofit, founded in 2001, has refurbished more than 24,000 computers for families. “We’re aware that affordability is the biggest issue around, and this doesn’t make it any better for folks,” Sevick said. The legal limbo exacerbates existing gaps in access, particularly for those who cannot afford private internet subscriptions.
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The legal friction here mirrors the broader administrative shift away from demographic-based metrics in federal programs, a trend that has historically slowed the rollout of targeted social services. While the court allowed the program to continue, the removal of specific demographic safeguards may change how funds are distributed in practice, potentially favoring areas with stronger existing infrastructure over those with the greatest need.
Political Backlash and Future Uncertainty
Sen. Patty Murray (D-Wash.), a primary sponsor of the law, said she will be “watching very carefully to ensure this administration does what Congress intended.” “It is indisputable that these challenges are particularly pronounced in low income, rural, and Tribal communities — and there’s a reason Democrats and Republicans across the country support this program so strongly,” Murray said in a statement to KFF Health News.
Sen. Ted Cruz (R-Texas) voted against Biden’s infrastructure bill in 2021 and sent a letter to the National Telecommunications and Information Administration in late 2024 asking the agency to pause the $1.25 billion competitive grants program, arguing the use of racial classifications “does not serve a compelling governmental interest.” Cruz did not respond to requests for comment.
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The agency’s administrator, Arielle Roth, previously served as a policy director for the Senate Commerce Committee’s majority staff under Cruz. She was appointed by Trump to lead the agency.
In response to Bates’ decision, federal attorneys said the government would reinstate the NDIA-related competitive grant program without racial classification. The government aims to release a new grant application in December, according to a joint status report filed in the case. The NDIA now must reapply for the grant award, which was slated to be disbursed among more than a dozen organizations and tribes, including the Cherokee Nation in Oklahoma, El Centro Hispano in Arkansas, Portland Community College in Oregon, and Community Service Programs of West Alabama. The grants are meant to go toward digital navigator programs, in which community workers teach technology and internet skills, according to the NDIA.
