The engineering question before the Federal Communications Commission, whether a satellite can reach an ordinary handset without degrading the network on the ground, has been settled in principle for two years. What changed this week is who pays for the right to try. On October 31 SpaceX filed its answer to T-Mobile’s objection, and a proceeding that began as a technical exercise became a contest over the ownership of spectrum, and with it the economics of the American mobile market.
SpaceX argues that T-Mobile is using the commission to hold back a competitor. T-Mobile, filing with AT&T and Verizon through the industry group CTIA, argues that satellite downlinks in two heavily used 5G bands would damage terrestrial networks; the carrier has said interference could wipe out as much as 96 per cent of a cell site’s uplink coverage area. The two bands in dispute, 2.5GHz and 3.45GHz, make up 290MHz of the 482MHz the commission has proposed to open.
Both claims can be true at once, which is what makes the case worth following. A satellite serving a phone in a field and a tower serving a phone in a suburb compete for the same airwaves, and the rules that decide which of them wins were written when nobody expected the competition.
The mechanism is called supplemental coverage from space. Under the framework the commission adopted in 2024, a satellite operator does not receive spectrum of its own. It leases it from a terrestrial licensee and operates as a secondary user, in areas where that licensee holds rights and on terms the licensee accepts. Because mobile licences are carved up by region and by holder, an operator that wants a national service must reach agreement with every co-channel licensee across the country. That requirement, more than any interference limit, is what has kept satellites out of the mass market.
The notice of proposed rulemaking adopted on October 29 goes at the requirement directly. It would let an operator certify coexistence agreements covering only the areas it intends to serve, or certify that it holds the terrestrial licences itself. It would raise the number of bands eligible for the service from five to 13, apply a licence-by-rule approach to handsets so that phones already in people’s pockets need no individual certification, and open a 60-day comment period once the text reaches the Federal Register. A companion item proposes an auction of 25MHz between 1675 and 1695MHz and between 2020 and 2025MHz. The vote was 3-0 and handed nobody a licence.
What it handed SpaceX was a route. The company has spent the past year assembling the second path the notice describes, holding the licences rather than borrowing them. It agreed in September 2025 to buy EchoStar’s AWS-4 and H-block spectrum, 50MHz, for about $17bn in cash and stock. It agreed this month to acquire Grain Management’s nationwide 800MHz portfolio, and on October 21 the commission approved its purchase of three unused AWS-3 licences from Tristar. Earlier in the month the regulator cleared a constellation of 15,000 next-generation direct-to-cell satellites. Gwynne Shotwell, SpaceX’s president, has said service on the company’s own airwaves is targeted for early 2028.
The commission has not been a rubber stamp. It rejected 2.5GHz for satellite coverage when it adopted the framework in 2024, and in April it dismissed a SpaceX petition seeking access to mobile satellite spectrum held by incumbents. That history matters to the carriers’ case: an agency that had already ruled against the applicant twice is not an agency in anyone’s pocket.
The awkward fact for T-Mobile is that it already sells the service it is trying to contain. T-Satellite costs $10 a month and is available to AT&T and Verizon subscribers as well as its own, and T-Mobile remains SpaceX’s American launch partner for the constellation. The carrier is, in effect, both distributor and litigant. Its objection is less about whether the service should exist than about who controls the price of it once the partner becomes the rival.
Two other decisions frame the same question. On October 27 the commission approved Amazon’s $11.6bn acquisition of Globalstar, giving a second orbital entrant its own mobile satellite spectrum. In May the three carriers agreed in principle to pool spectrum for a satellite venture of their own. The agency is therefore not picking one winner. It is drafting a template that four or five well-capitalised parties will use.
The template will travel. The 2024 framework was presented as the first of its kind, and regulators in Canada, Japan, Australia and Europe have opened consultations on the same question while the International Telecommunication Union moves at its own pace. A decision by the largest market to let satellite operators hold terrestrial licences would be copied quickly, and would settle for a decade whether orbital networks are an extension of terrestrial carriers or a substitute for them.
That is the larger question the argument over 290MHz is standing in for. For three decades the United States has allocated commercial spectrum by auction, on the theory that a sale turns a public asset into cash and forces bidders to say what the airwaves are worth. Certification by service area does neither. In exchange it offers coverage in places where no tower will ever be built, at a price no market has yet tested.
Sixty days of comment will not produce a consensus on that trade. But the commission’s eventual answer will decide whether a company that launches satellites may also become the company that bills for the calls they carry. On the evidence of the past week, both sides have begun negotiating as though it already can.
