Elon Musk called it “the final critical piece of the spectrum puzzle needed for SpaceX (NASDAQ: SPCX) to provide comprehensive phone coverage in America” - and it looks like the puzzle is close to being completed.
The Federal Communications Commission (FCC) announced on November 10 that it had accepted an application from Musk’s Starlink Spectrum Holdings to purchase 800 MHz specialty mobile radio service licenses from investment firm Grain Management.
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The deal could cost $8 billion, as reported by the Wall Street Journal. In a regulatory filing submitted in October, when the proposed purchase was first announced, SpaceX claimed it would “ensure all Americans have access to mobile broadband, wherever they go.” In its announcement, the FCC agreed, noting that access, centered on wireless service from cell towers, would be available to “approximately 100 percent of the U.S. population.”
Rejection by major carriers
The deal could also compound apparent concerns from the nation’s three major carriers — Verizon (NYSE:VZ), AT&T (NYSE:T) and T-Mobile (NASDAQ:TMUS) — all of which reportedly rejected Elon Musk’s previous requests to allow his mobile service to piggyback on their existing networks. The companies, through CTIA, their wireless communications trade organization, also warned the FCC that broader radio spectrum development could “have real consequences for consumers who depend on ever-increasing wireless capacity to access the modern economy and meet their daily needs.”
T-Mobile also separately appealed to the FCC, saying that quality of service in the 5G network could suffer if the agency made more spectrum bands available. And in October, the three wireless carriers announced their own joint satellite partnership to expand coverage to “underserved areas” across the country.
SpaceX, meanwhile, spent $17 billion to buy spectrum from Boost Mobile’s parent company, EchoStar — a deal approved by the FCC in May.
A T-Mobile spokesperson told Moneywise: “We welcome competition because it pushes us to be better and creates more value for customers. Spectrum and towers alone do not constitute a network. Building a leading wireless network, providing premium service and earning customer trust takes a lot of time, investment and expertise. Satellite technology plays an important role in expanding connectivity, but it is complementary to terrestrial networks.
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