Approval by the FCC brings Musk and rivals closer to satellite phone service

The Federal Communications Commission approved preliminary rules for direct satellite phone calls, a $30 billion market that's attracting Elon Musk's SpaceX and competitors such as AT&T Inc's AST SpaceMobile.

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With a 4-0 vote on Thursday, the Federal Communications Commission tentatively approved regulations for the service, which would extend mobile-phone reception to places beyond cell coverage, offering access in remote areas. There will be a second vote before the rules become final.

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“There are a lot of opportunities in the space economy, and with clear rules, I believe we can facilitate more innovation in the space economy, as well as increase wireless coverage in remote areas, unserved and underserved areas,” according to FCC Chairwoman Jessica Rosenworcel before the vote at the agency's monthly meeting in Washington on Monday. “We can make mobile dead zones a thing of the past.”

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There are many companies, including Iridium Communications Inc., that have offered direct connections between handheld devices and satellites, using expensive specialized equipment, for many years. It is intended that the new services will offer connections using normal mobile phones that are used by consumers.

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It is becoming increasingly convenient to receive phone calls directly from space, an aspiration that has been brewing for years. At a conference on March 13, Jonathan Hofeller, vice president of commercial sales at SpaceX's Starlink unit, said that the company is planning to test calls through space as part of a partnership with T-Mobile US Inc., as part of a partnership with Musk's Space Exploration Technologies Corp.

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AST SpaceMobile and AT&T are eyeing frequencies for call-via-satellite, but the FCC has changed the draft language that barred their use, agency staff said. Airwaves in that area are assigned to AT&T's FirstNet network, which provides wireless services to public safety officials.

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AT&T and AST SpaceMobile both requested that the FCC approve direct-to-satellite service on the FirstNet airwaves, which are being used for testing.

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With direct-to-satellite, the world's estimated 5 billion mobile phones will have coverage if they are outside cell coverage areas. They also plan to offer service in remote places, such as mountains and oceans, where there is no cell signal at all. 

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GSMA, a mobile industry body, estimated last year that revenue from such connectivity could reach $30 billion by 2035.