Musk, Rivals Edge Closer to Satellite Phones After FCC Nod

(Bloomberg) -- US regulators gave preliminary approval to rules for offering phone calls via direct links to satellites, a potential $30 billion market that’s attracted Elon Musk’s SpaceX and competitors including AT&T Inc. partner AST SpaceMobile Inc.

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The Federal Communications Commission on a 4-0 vote Thursday tentatively approved regulations for the service, which would expand mobile-phone reception to places beyond cell coverage, offering access in remote areas. The rules won’t become final before a second vote that wasn’t immediately scheduled.

“By providing clear rules, I believe we can kick-start more innovation in the space economy, while also expanding wireless coverage in remote, unserved and underserved areas,” FCC Chairwoman Jessica Rosenworcel said before the vote at the agency’s monthly meeting in Washington. “We can make mobile dead zones a thing of the past.”

Companies including Iridium Communications Inc. have long offered connections directly between handheld devices and satellites, using expensive specialized equipment. The new services aim to offer connections using normal consumer mobile phones.

Phone coverage directly from space, a years-long aspiration, is coming closer to reality. Musk’s Space Exploration Technologies Corp. plans to test calls via orbit this year as part of a partnership with T-Mobile US Inc., Jonathan Hofeller, vice president of commercial sales at SpaceX’s Starlink unit, said at a conference on March 13.

The FCC changed draft language that proposed barring the use of frequencies eyed for calls-via-satellite by AT&T and Midland, Texas-based startup AST SpaceMobile, and now seeks comments on allowing their use, agency staff said in a news conference. Those airwaves are assigned to FirstNet, a wireless network for public safety officials operated by AT&T.

In filings, both AT&T and AST SpaceMobile had asked the FCC to allow direct-to-satellite service on the FirstNet airwaves, which are being used to test the service.

“We support the FCC’s efforts to allow mobile networks to integrate supplemental satellite coverage,” AT&T said in an emailed statement. “We look forward to participating in the development of rules that facilitate increased coverage and foster competition.”

Direct-to-satellite proponents plan to offer coverage when the world’s estimated 5 billion mobile phones stray from cell coverage areas. And they expect to offer service in places with no nearby cell signal at all, such as in remote mountains or far out at sea.

Industrywide revenue for such connectivity could reach $30 billion by 2035, or about 3% of total industry revenue, GSMA, a mobile industry body, said last year.

(Adds comment in eighth paragraph. A previous version of this story corrected the location of AST SpaceMobile.)

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