FCC Chair Brendan Carr Says Elon Musk’s SpaceX Now Has Spectrum To Challenge Wireless Giants — ‘People Are Serious About…’

During an interview with CNBC on Friday, Carr said the FCC is preparing for a major expansion in spectrum availability as satellite and terrestrial technologies increasingly converge.

• Carr said the FCC’s approach is focused on getting more spectrum into the hands of companies willing to invest and compete, rather than deciding which technologies or providers will ultimately win.
• He pointed to the FCC’s plans to bring more than $100 billion worth of spectrum into the market over the next two years, arguing that increased competition should ultimately benefit consumers.
• Carr believes SpaceX has assembled an increasingly credible foundation for a much bigger challenge to the traditional wireless industry.

Federal Communications Commission Chair Brendan Carr said Elon Musk-led Space Exploration Technologies Corp. (SPCX) is increasingly positioned to challenge America’s biggest wireless carriers as Starlink expands from satellite connectivity into direct-to-device and mobile services.

During an interview with CNBC on Friday, Carr said the FCC is preparing for a major expansion in spectrum availability as satellite and terrestrial technologies increasingly converge.

SpaceX shares gained more than 1% during the regular trading session on Friday, and rose 0.1% further in the after-hours trade.

Carr Sees A New Era Of Wireless Competition

Carr said the FCC’s approach is focused on getting more spectrum into the hands of companies willing to invest and compete, rather than deciding which technologies or providers will ultimately win.

“We're seeing a lot of competition. We're seeing a lot of innovation,” Carr said.

He pointed to the FCC’s plans to bring more than $100 billion worth of spectrum into the market over the next two years, arguing that increased competition should ultimately benefit consumers.

Carr expects the resulting competition to translate into faster service and lower prices, describing the current environment as “really interesting.”

He also suggested that the wireless market is entering a period where traditional carriers, satellite operators and technology companies could increasingly compete on the same playing field.

SpaceX Is Building A Spectrum Portfolio For Mobile

A key piece of SpaceX’s strategy is the spectrum it has accumulated as it pushes Starlink toward a broader mobile offering. Carr noted that SpaceX already obtained mid-band spectrum through its deal involving EchoStar and now has access to low-band spectrum as well.

That combination could become particularly important because different portions of the wireless spectrum serve different purposes.

Low-band spectrum travels farther and penetrates buildings more effectively, while higher bands can deliver greater capacity but have shorter range. Mid-band sits between the two, offering what Carr called the “Goldilocks” combination.

“People are serious about getting into the terrestrial game. You're going to want a portfolio that includes both mid-band and low band,” he added.

Carr said FCC is also moving to make additional spectrum available for direct-to-device services, which allow smartphones to connect directly to satellites.

The Big Question: Can SpaceX Build A Wireless Network?

The biggest uncertainty is whether SpaceX intends to become a conventional wireless carrier rather than simply using satellites to supplement existing networks to compete with AT&T Inc. (T), T-Mobile US Inc. (TMUS), and Verizon Communications Inc. (VZ).

“Is SpaceX serious about being a, you know, traditional mobile wireless carriers with terrestrial towers?” he said. “There's people that are taking both sides of that bet right now.”

Verizon has argued that spectrum alone is not enough to compete with established wireless providers, raising questions about the terrestrial infrastructure SpaceX would need to build.

Carr said the FCC will not pick the winner. “We're going to step back and watch it,” he said. For now, however, he believes SpaceX has assembled an increasingly credible foundation for a much bigger challenge to the traditional wireless industry.

With more spectrum expected to come to market, Carr suggested the competitive landscape could become even more crowded.

Bernstein senior analyst Madison Rezaei highlighted a potentially unexpected group of winners thanks to the SpaceX deal, which are the companies that own the towers supporting America's cellular networks. This includes Crown Castle Inc. (CCI), American Tower Corp. (AMT) and SBA Communications Corp. (SBAC).

What Retail Investors Think Of SPCX Stock

Retail sentiment on Stocktwits around SpaceX trended in the ‘bullish’ territory at the time of writing.

SPCX stock is up 8% year-to-date. The S&P 500 ETF (SPY) and the Vanguard Morningstar Total Stock Market ETF (VTI) are up 16% over the past 12 months.

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