On July 15, 2026, Judge John D. Bates of the U.S. District Court for the District of Columbia issued a decision that could revive a federal grant program the President declared dead more than a year ago. In National Digital Inclusion Alliance (NDIA) v. Trump (Civil Action No. 25-3606), the court held that the Digital Equity Act of 2021 contains an unconstitutional racial classification, but that this single flaw does not doom the law. The court concluded that the relevant provision, which directs consideration of “individuals who are members of a racial or ethnic minority group” in awarding grants, can be ignored without impairing the operation of the rest of the statute (in legal parlance, “severed”). Thus, NDIA's claim to otherwise restore the Digital Equity Competitive Grant Program survives, minus any consideration of the race or ethnicity of the people the grant projects serve.

Most importantly for the cities, nonprofits, and digital inclusion practitioners who applied for—and in some cases won—Competitive Grant Program funds: the court relied upon the government’s submission that it would "now commit[] to restoring the Competitive Grant Program upon receiving this judicial determination."

This is a ruling on the government's motion to dismiss the entire case, not a final judgment. The court has not ordered the program restored; it has held that the remaining aspects of NDIA's challenge may go forward. However, the resolution of the constitutional question essentially addresses the government's stated reason for ending the program.

The Digital Equity Act, Briefly

Congress passed the Digital Equity Act on November 15, 2021, as part of the $1.2 trillion Infrastructure Investment and Jobs Act. The Digital Equity Act appropriated $2.75 billion to "promote digital inclusion activities, and spur greater adoption of broadband among covered populations." The Digital Equity Act created three grant programs:

1. The State Digital Equity Planning Grant Program, which helped states devise digital equity plans;
2. The State Digital Equity Capacity Grant Program, which provides funding for states to implement their digital equity plans; and
3. The Digital Equity Competitive Grant Program, which provides funding for individual applicants—mostly cities and nonprofit entities to carry out digital inclusion activities aligned with states' digital equity plans.

All three programs are administered by the National Telecommunications and Information Administration (NTIA) with help from the National Institute of Standards and Technology (NIST), both within the Department of Commerce. In the Competitive Grant Program—the program at issue in this case—NTIA was charged by Congress to review applications and recommend determinations to NIST, which would make final approval of awards. 

The statute directs NTIA to consider whether an award will "increase internet access and the adoption of broadband among covered populations to be served by the applicant." The Act defines "covered populations" as eight groups:

1. Individuals who live in covered (low-income) households;
2. Aging individuals;
3. Incarcerated individuals (other than those in federal facilities);
4. Veterans;
5. Individuals with disabilities;
6. Individuals with a language barrier, including English learners and people with low literacy;
7. Individuals who are members of a racial or ethnic minority group; and
8. Individuals who primarily reside in a rural area.

The seventh category is the one the court found unconstitutional.

How We Got Here

The National Digital Inclusion Alliance (NDIA) is a nonprofit dedicated to expanding internet access. NDIA's flagship program, the Digital Navigator initiative, trains staff and volunteers to help community members use online services.  NDIA applied for funding through the Competitive Grant Program to equip 13 Digital Navigator partnerships, projecting that it would serve over 30,000 people in covered populations. On January 6, 2025, NTIA awarded NDIA funding; later that month, NIST informed NDIA it would receive over $25 million over five years.

NDIA never received the money. The court recounts the sequence:

• January 20–21, 2025: President Donald Trump signed Executive Orders 14151 and 14173, characterizing "diversity, equity, and inclusion" (DEI) as "discriminatory" and "illegal" and ordering agencies to terminate related programs. 
• April 9, 2025: NTIA emailed NDIA that costs associated with DEI conferences, trainings, and professional development would not be allowable. 
• May 8, 2025: President Trump announced via social media that he believed the Digital Equity Act was unconstitutional because it required allocating federal funding on the basis of race, and said he was "ending" the Act's initiatives "immediately." 
• May 9, 2025: NIST sent NDIA a formal letter terminating the Competitive Grant Program and the grants made under it, stating the decision was final with no right of administrative appeal. 
• March 4, 2026: Solicitor General D. John Sauer sent Congress the letter required when the government declines to enforce a statute on constitutional grounds. Notably, the letter asserted that both the Capacity Grant Program and the Competitive Grant Program require the government to consider the race of grant beneficiaries. 

NDIA sued, challenging what it called the "unilateral repeal by the Executive Branch of the Digital Equity Competitive Grant Program." Importantly, NDIA clarified during the litigation that it challenges the cancellation of the program—not the termination of its own $25 million award. NDIA "seeks the opportunity to compete."

What the Court Decided

Judge Bates ruled on a handful of issues.

1. The case belongs in federal district court, and NDIA has standing. The government conceded both points, and the court agreed. Because NDIA challenges a program cancellation rooted in the Constitution and the Digital Equity Act—not a contract dispute over its individual award—the claims belong in district court rather than the Court of Federal Claims. And under the D.C. Circuit's 2025 decision in Global Health Council v. Trump, the denial of the opportunity to compete for a pool of funds is a concrete, redressable injury. 

2. NDIA's claims proceed under the Administrative Procedure Act. The court dismissed NDIA's two additional constitutional claims (separation of powers and the Spending Clause) because the Administrative Procedure Act (APA)—the statute that allows private parties to sue federal agencies for unlawful action—provides an adequate remedy and therefore displaces them. But NDIA's parallel APA claims survive, including its claim that the termination was "contrary to constitutional right" under APA section 706(2)(B).

3. The race provision is an explicit racial classification that fails strict scrutiny. This is the heart of the opinion. The court held that by categorizing "individuals who are members of a racial or ethnic minority group" as a covered population and instructing the government to weigh whether applications benefit covered populations, the Digital Equity Act "empowers the government to consider race when allocating federal money"—an explicit racial classification subject to strict scrutiny, the most demanding form of judicial review. Applying the Supreme Court's 2023 decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College, the court found the provision fails both prongs of that test: 1) Congress identified no compelling governmental interest justifying the classification in the statute or the legislative record, and 2) the provision is not narrowly tailored to remedy any specific instances of past discrimination. Addressing the digital divide's disproportionate impact on communities of color is "a laudable goal," the court wrote, but under Supreme Court precedent, trying to reduce broad, societal inequalities does not justify race-based government action. 

4. But the race provision is severable, so the program survives. The court held that the Digital Equity Act "is perfectly capable of functioning independently without the racial classification." Grant money can still be allocated among the remaining seven covered populations, and the program "can be administered—consistent with the language of the Digital Equity Act—exactly as it was before, minus consideration of racial or ethnic status." The court noted that nullifying the entire Act "would deprive all Americans who lack reliable broadband of access to funds," and that "[c]ommon sense dictates that Congress would prefer to have a version of the Digital Equity Act without the racial criterion than to have no law at all."

5. The DEI reimbursement claim is dismissed as premature ("unripe"). NDIA separately challenged the policy barring reimbursement for DEI-related conference and training costs. The court dismissed this claim because it is not yet clear whether or how that policy will apply to the renewed program.

What Happens Next

The court granted the government's motion to dismiss in part—dismissing NDIA's separation-of-powers, Spending Clause, and arbitrary-and-capricious claims—and denied it as to the remaining counts, so NDIA's core Administrative Procedure Act claims challenging the program cancellation continue. But the practical endgame may arrive sooner: the government has committed to reinstating the Competitive Grant Program now that a court has determined the race criterion is unconstitutional and severable. When that happens, the court will consider whether some or all of NDIA's claims are moot. The court ordered the parties to file a joint status report by August 1, 2026, proposing a schedule for further proceedings—"particularly in light of the government's representation that it will reinstate the Competitive Grant Program upon receiving this decision."

Shifts, Silences, and Careful Wording

Digital equity advocates may want to keep an eye on some issues in this decision that may not grab any headlines.

The Capacity Grant Program's fate is unresolved.

The Solicitor General's March 2026 letter to Congress asserted that both the Capacity and Competitive Grant Programs unconstitutionally require consideration of race. But only the Competitive Grant Program was at issue in this case, and the opinion does not address whether or how its severability reasoning applies to the state-administered Capacity Grant Program. State broadband officials should note this gap.

Terminated grantees get nothing from this ruling—by design.

NDIA expressly disclaimed any challenge to the termination of its own $25 million award, seeking only "the opportunity to compete."  Thus, the decision does not control the fate of other individual grants made or proposed under the Competitive Grant Program. Under the channeling framework the court applied—drawn from Justice Barrett's controlling concurrence in NIH v. American Public Health Association—claims over individual grant terminations belong in the Court of Federal Claims as contract disputes, not in federal district court. Organizations whose awards were terminated should not read this opinion as restoring their funding.

No reinstatement deadline—but a first checkpoint.

The opinion says the government "plans to imminently reinstate" the program but sets no deadline for doing so. The court, however, ordered a joint status report by August 1, 2026, which should offer the first public indication of the government's timeline and the shape of the renewed program.

The court validated executive non-enforcement—with a caveat buried in a footnote.

The court accepted that the Executive Branch may decline to follow a statute it concludes is unconstitutional, pending judicial review, citing then-Judge Kavanaugh's opinion in In re Aiken County. But in a footnote, the court pointedly questioned whether a single unconstitutional provision "allows the government to suspend the entire Digital Equity Act in the first instance, prior to securing judicial review"—suggesting the executive branch likely shares the courts' obligation to sever the bad from the good rather than scrapping whole statutes. That footnote may be the opinion's most consequential language for the dozens of other funding-termination disputes the court alludes to at the outset of this decision.

The separation-of-powers question was never decided.

The government conceded, at this stage, "that the President lacks the power to cancel laws passed by Congress based on his bald disagreement with Congress's policy determinations." Because the case turned on the government's constitutional defense instead, no court has ruled on the broader unilateral-repeal theory here.

Carefully chosen framing.

The court repeatedly anchors its constitutional holding to "current Supreme Court case law, particularly Students for Fair Admissions"—a formulation that signals the outcome is dictated by recent precedent. And the court characterizes the government's position as "half right": right that the race provision is unconstitutional, wrong that this justified terminating the entire program.

A Win, a Loss, or Both?

How you read this ruling may depend on where you sit. For digital equity advocates, the bottom line is real: a federal court rejected the argument that a single constitutional flaw justified scrapping the Competitive Grant Program, and the government has told the court it will restore the program now that a judge has resolved its only stated objection.

But the government may have won something larger than it lost. A federal court has now held that a provision of the Digital Equity Act is unconstitutional—adopting the Administration's reading of Students for Fair Admissions and finding that Congress supplied no justification that could survive strict scrutiny. The court also accepted that the Executive Branch may decline to enforce a statute it deems unconstitutional while awaiting judicial review. And the government's commitment to restore the program is a statement in a legal brief, not a court order; the court has not yet granted any relief, and it noted that once the program is reinstated, some or all of NDIA's claims may become moot. That means the shape of the restored program—its guidelines, its treatment of the seven remaining covered populations, its timeline—will be decided, at least initially, by the same Administration that ended it.

The Digital Equity Act survives. What it looks like in practice is now an open question—one that will be answered as much by NTIA's next moves as by anything a court has said.

[Editor's note: The Benton Institute for Broadband & Society filed an amicus brief in support of NDIA, arguing the Digital Equity Act's purpose is to address systemic, population-level disparities in internet access.]

Court Documents

• Opinion
• Order

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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