How Elon Musk’s FCC Friendship Smooths SpaceX’s IPO Path

Days after the November 2024 US presidential election, Brendan Carr, a member of the Federal Communications Commission, posted a photo of himself with Elon Musk and President-elect Donald J. Trump at a rocket launch for SpaceX.

“Historic day at Starbase,” Mr Carr wrote in the post, referring to the Texas headquarters of Mr Musk’s rocket and satellite company. “Another giant leap forward.

Around the same time, Mr. Musk recommended Mr. Carr to Mr. Trump as the ideal leader of the agency. Shortly thereafter, Mr. Carr got the job.

Since then, the FCC chairman has praised Mr. Musk and repeatedly expressed his admiration for the tech mogul. He gave the green light to SpaceX’s satellite applications and changed some of the agency’s rules in the company’s favor.

“I would be very hesitant to bet against Elon Musk,” Mr. Carr, a Republican, told Reuters last month. Those who did, he said, “lost a lot of money along the way.”

Mr. Carr’s attitude toward SpaceX and Mr. Musk stands out from his behavior toward other companies the FCC oversees. After Mr. Musk’s company complained about it, he launched an investigation into satellite company EchoStar, a SpaceX rival. He targeted the ABC and NBC television networks for their coverage of Mr. Trump and threatened to revoke their broadcast licenses. And him threatened to block Media and telecommunications agreements on their diversity, equity and inclusion policies and the opening of investigations by Disney and Comcast.

“Mr. Carr’s favoritism is inappropriate for a public official tasked with overseeing what is supposed to be an independent consumer protection agency,” said Jessica J. González, co-chair of Free Press, a left-leaning media and technology group. She added that it was rare for a public official to appear to be “picking winners and losers”.

The relationship between Mr. Musk and Mr. Carr is more important than ever as SpaceX prepares for the world’s largest initial public offering this week. As the top regulator of broadcasting and communications licenses, which are required to carry publicly owned signals, Mr. Carr has great influence over the expansion of Starlink, SpaceX’s cash cow and sole profitable subsidiary. The service’s 9,600 satellites fly in low Earth orbit and deliver Internet service to 10 million customers around the world, including airlines, governments and the Ukrainian military.

Starlink made more than $11.4 billion last year, accounting for 61 percent of SpaceX’s total revenue, according to company data, and said it could eventually grow to as much as $1.6 trillion. SpaceX expects to be valued at $1.77 trillion after going public, which would make it bigger than Meta, and it will need Starlink to justify that valuation and continue to grow.

The FCC was mentioned 25 times in SpaceX’s offering prospectus — more than any other government agency — including references to its satellite spectrum licenses. The Federal Aviation Administration, which oversees rocket launches, was referenced 23 times.

“Carr took several actions that benefited Musk the most,” said Blair Levin, a consultant at New Street Research, an investment research firm, and a former chief of staff at the FCC. He added that Starlink “got a huge amount from the Trump administration and Carr.”

Mr Carr denied favoring SpaceX and said he supported all companies. In February, he approved Amazon’s request to launch 4,500 satellites for its Leo satellite Internet service, which also competes with SpaceX.

“President Trump is restoring US leadership in next-generation technology,” an agency spokesman said in a statement. “And the FCC’s work to strengthen America’s space economy is part of that effort. We now have several different satellite providers competing to provide consumers with affordable high-speed connectivity.”

Mr. Musk and SpaceX did not respond to requests for comment.

It is not clear when Mr Carr and Mr Musk first met. Mr. Carr has long said he admires Mr. Musk’s stance on free speech and that liberals have unfairly targeted entrepreneurs during the Biden administration.

In 2022, a public interest group asked the FCC to block Mr. Musk’s $44 billion acquisition of Twitter, now X. Mr. Carr, one of five commissioners at the agency at the time, issued a statement saying the FCC had no authority to do so.

A year later, the FCC revoked Starlink’s access to the Rural Digital Opportunity Fund, a federal grant program that provides Internet service to communities with little or no access. Starlink did not meet the speed and other technical requirements for eligibility, Jessica Rosenworcel, the Democratic-appointed chairwoman of the agency under the Biden administration, said at the time.

Starlink quickly lost $885 million in subsidies. Mr Carr called the move “regulatory harassment” against Mr Musk.

In 2024, Mr. Carr again came to the defense of Mr. Musk.

The nonprofit Ukrainian Congressional Committee of America has asked the FCC to block Starlink’s satellite licenses over claims of jamming communications during the Ukraine-Russia war. Mr Musk rejected a Ukrainian request to activate its Starlink satellite network in the Crimean port city of Sevastopol to help attack the Russian fleet, the group claimed.

Mr Carr condemned the group’s petition, saying it was “part of a clear and repeated pattern of regulatory harassment that accelerated the moment Elon Musk stood up for free speech”. The FCC did not act on the request.

Mr. Musk invited Mr. Carr to SpaceX’s Boca Chica, Texas facility in August 2024, where the men posed for a photo together.

“Elon Musk transformed long-dormant industries and developed the first principles of a ‘manufacturing algorithm’ to deliver results,” Mr Carr wrote at the time.

The next month, Mr Carr revealed on X that he had sent a warning letter to Brazilian telecoms regulators, who had threatened to freeze Starlink’s services. The government there blocked X in Brazil for spreading hate and misinformation. However, Starlink Internet continued to provide users with access to social media sites.

Mr. Carr threatened that penalizing Starlink would damage the FCC’s partnership with Brazilian regulators.

“Much appreciated,” Mr. Musk responded to Mr. Carr’s post. Mr. Musk eventually relented in Brazil and complied with government demands that X block certain accounts spreading misinformation. His businesses still operate there.

During the presidential transition, Mr. Musk made Mr. Carr’s recommendation for the FCC job. Mr Carr later launched an investigation into EchoStar after SpaceX complained that its rival was not making full use of its spectrum, valuable radio frequencies used to carry phone calls and broadband internet.

Mr. Carr’s intervention led EchoStar to sell part of the spectrum to SpaceX a year later for $17 billion. Starlink could use that spectrum to send its services directly to consumer phones and other devices, allowing it to compete with AT&T and Verizon, telecom analysts said.

EchoStar did not immediately respond to a request for comment.

In January, the FCC granted SpaceX’s request to deploy 7,500 satellites to boost internet service around the world, over protests from some rivals that the approval may harm competition. That same month, SpaceX asked the FCC for permission to deploy one million satellites to create data centers in space to help support the development of artificial intelligence, an application that is still ongoing.

Astronomers and environmentalists said SpaceX’s application could change the sky and create a junkyard for space junk. Sleep experts have also warned that floating data centers could be lit in a way that would disrupt the circadian rhythms of plants and animals.

Amazon also responded, calling the Starlink app “more of a lofty ambition than an actual plan” that would take centuries to complete.

But Mr. Carr was having none of it.

“Amazon should focus on the fact that it will fall short of roughly 1,000 satellites to meet its upcoming deployment milestone, rather than spending its time and resources filing petitions against companies that put thousands of satellites into orbit,” he wrote on X in March.

After lobbying SpaceX, the FCC in April loosened decades-old rules dictate how satellites can share the spectrum. The FCC voted modernize the rules, which will lower costs for satellite Internet companies and allow for faster service.

Agency said the rulemaking process benefited from “rarely available real-world measurement campaigns” by SpaceX and Starlink.

Ryan Mac contributed reporting from Los Angeles and Theodore Schleifer from Washington.