A recent court ruling holds good news for digital skills advocates, signaling that $1.25 billion in Digital Equity Act funding is back on the table. NSC Senior Government Affairs Manager Caroline Treschitta and Senior Fellow Amanda Bergson-Shilcock explain what happened, and what it means for skills advocates.
Q. What is the court case about?
A: The nonprofit National Digital Inclusion Alliance (NDIA) sued the federal government because the US Department of Commerce had canceled grants that were to be made under the Digital Equity Act. Congress had authorized $1.25 billion in Digital Equity Competitive Grants as part of the Bipartisan Infrastructure Law passed in 2021.
However, the grants had not been finalized by the end of the Biden administration, and after the Trump administration took office, the President announced in May 2025 that the program was unconstitutional and would be canceled.
NDIA is represented in court by the Lawyers’ Committee for Civil Rights Under Law. NDIA’s lawsuit argues that the administration’s unilateral decision to end the DE program is unconstitutional and violates the separation of powers between the executive and legislative branches of government.
Q. What is the new update in the court case?
A: In July 2026, federal district court judge John Bates issued a ruling on the Trump administration’s motion to dismiss the case. The ruling was not a final judgement for the entire case.
The new ruling agreed with the Trump administration’s claim that one provision of the DE Competitive Grant Program was unconstitutional – the provision that allowed funds to be allocated based on the race or ethnicity of the people served by grant awardees.
However, the judge also ruled that because this provision could be severed from the rest of the statute, the rest of the Competitive Grant Program should be restored. In the Court’s words:
NDIA’s claim to restore the Competitive Grant Program, minus the statutory text authorizing the government to consider the race of grant beneficiaries, thus survives. And because the government’s only objection to the Digital Equity Act is this singular unconstitutional provision, it has now committed to restoring the Competitive Grant Program upon receiving this judicial determination.
Q: What happens next?
A: The judge ordered the government and NDIA to file a joint status update with the court, which they did on August 3, 2026. As part of this update, the government stated that it plans to issue a new Notice of Funding Opportunity (NOFO) for the DE Competitive Grant program. This new NOFO is anticipated to be released in December 2026. This timeline is only approximate and may change.
It is important to note that any NOFO issued by a federal agency needs to reflect the requirements that Congress set in statute (with the exception, in this case, of the one element that the judge has struck down).
But within those statutory parameters, agencies have significant discretion to design grant programs that reflect the policy priorities of the current administration. Potential applicants should therefore not expect that a new NOFO from the Trump administration would necessarily mirror the prior NOFO issued by the Biden administration.
Q. What does this mean for organizations that were previously awarded DE Competitive Grants back in the Biden administration?
A: The government’s recent status update to the judge does not mention what will happen to organizations that were previously awarded (but never received) DE grants.
It’s possible that the government is expecting that its forthcoming NOFO would apply to all of the DE Competitive Grant funding, meaning that prior grantmaking decisions would not be honored. However, this is not yet clear.
As a reminder, NDIA’s lawsuit only concerns the program itself, not specific grant awards. Organizations that were previously awarded DE Competitive Grant funding have always been able to file individual lawsuits to try to compel the federal government to restore their funding, but those cases would be considered separately.
Q. Does this court ruling have any effect on the DE funding that states were to receive?
A: It is unclear. Under the Digital Equity Act, there was also a separate funding stream known as the DE Capacity Grant program, for which $1.44 billion was allocated. Every state was supposed to receive a portion of these dollars according to a funding formula. However, due to the President’s termination of the DE programs in May 2025, the funding was never distributed.
Because NDIA’s lawsuit is focused on the Competitive Grant program, not the Capacity Grant program, it is unclear whether the judge’s rationale for restoring the Competitive Grant funding would be relevant for DE Capacity Grants. To date, NSC is unaware of any litigation by states to try to force the release of Capacity Grant funds.
Q. What does this ruling mean for Digital Equity efforts serving people of color?
Both NDIA and the Lawyers’ Committee for Civil Rights issued statements reaffirming their commitment to fight for full inclusion. Damon Hewitt, president and executive director, of the Lawyers’ Committee, said, “A race-conscious policy that redresses real harm is lawful and constitutional. Striking these words from the statute will not make racial disparities disappear; it will only make them harder to address. The Lawyers’ Committee will continue this fight, in this case and beyond, because the communities we serve cannot be left on the wrong side of the digital divide.”
In addition, even though the judge’s ruling struck down the part of the Digital Equity Act that defined “racial and ethnic minorities” as one of its covered populations, it is important to note that the DE Act’s other covered populations remain intact. Many of these population groups – including veterans, rural residents, and low-income individuals – include significant numbers of people of color.
Q. What should education and workforce advocates be doing now?
A: Advocates should speak up to urge the rapid restoration of DE funding. Strategies to consider include:
Q. How can skills advocates find out what happens next in the court case?
The next joint-status update on the case is due to be filed with the court on August 17, 2026.
Follow NDIA for the latest updates about the litigation. The nonprofit Benton Institute is also a trustworthy source of information about telecommunications issues in general and the Digital Equity Act in particular. (See Benton’s recap of this lawsuit and most recent update.)
