‘Real consequences’: AT&T, Verizon and T-Mobile warn FCC as Elon Musk plots a SpaceX phone network for the US by 2028

Rudro ChakrabartiSun, October 25, 2026 at 1:45 PM UTC

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AT&T, Verizon and T-Mobile have spent months insisting a satellite company can’t compete with their networks. Investors aren’t convinced.

On Oct. 23, shares of AT&T (NYSE:T) and T-Mobile (NASDAQ:TMUS) each fell nearly 8% after Bloomberg reported that SpaceX is in talks to access at least 80,000 U.S. cell sites, a step toward becoming the country’s fourth nationwide carrier. Verizon (NYSE:VZ) slipped about 1.2%.

The selloff came a day after the carriers’ trade group, CTIA, filed a letter with the Federal Communications Commission following Oct. 20 meetings with agency officials. In it, CTIA warned that “the Commission’s buildout decisions have real consequences for consumers who rely on ever-increasing wireless capacity to access the modern economy and support their day-to-day living.”

The letter doesn’t mention SpaceX (NASDAQ:SPCX), which wants to become one of those carriers. On the company’s Oct. 20 earnings call, President Gwynne Shotwell said a new spectrum purchase and the FCC’s approval of its next satellites would “pave the way” for Starlink Mobile to become a major U.S. mobile carrier, with service on its own airwaves targeted for early 2028. Musk told analysts he sees “a clear path to several hundred billion dollars a year” in connectivity revenue, from a business that brought in about $5.2 billion in the third quarter.

The U.S. hasn’t had four national carriers since T-Mobile bought Sprint in 2020. Regulators approved the deal expecting Dish Network to build a fourth network. The plan fell apart in 2025, when Dish’s parent, EchoStar, agreed to sell spectrum to AT&T for about $23 billion and to SpaceX in deals now worth about $19.6 billion, and moved its Boost Mobile customers onto AT&T’s network. The FCC approved AT&T’s purchase and SpaceX’s in May.

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What AT&T, Verizon and T-Mobile want from the FCC

The carriers’ immediate concern is an FCC vote on Oct. 29. The agency will consider a proposal to update its rules for satellite-to-phone service, which it calls “supplemental coverage from space.” That’s when a satellite beams a signal straight to an ordinary phone using airwaves licensed to a regular carrier.

The FCC wrote those rules in 2024, but they’re narrow enough that every deployment approved since has needed a special exemption. The new proposal would make another 482 megahertz of airwaves available for satellite use. A yes vote would only put the plan out for public comment. FCC Chairman Brendan Carr has pitched it as a way to eliminate cellphone dead zones.

CTIA’s biggest ask is to keep satellites off two bands, 2.5 GHz and 3.45 GHz, that carry much of the carriers’ 5G traffic. Phones on those bands send and receive by taking turns in tightly timed slots, and CTIA says satellite service there isn’t technically workable. The 3.45 GHz band matters most to AT&T, which bought about 30 MHz of it nationwide from EchoStar in a deal that closed in July.

The carriers also want to keep control of their airwaves. Right now, satellite companies must lease spectrum from a carrier to use it. The proposal would loosen that, and CTIA wants carriers to retain the right to approve and terminate those arrangements.

CTIA also wants satellite providers held to the same service standards and consumer protections as regular carriers. It asked the FCC to hold off on a proposed cap on satellite signal strength at the edges of license areas until the agency studies it more. Even so, the group praised the FCC for expanding satellite service, as long as satellites stay secondary to land networks on carrier airwaves.

Carriers have their own satellite plans. In early October, AT&T, Verizon and T-Mobile formally launched a joint venture, first announced in May, to pool spectrum so more satellite companies can reach their customers.

T-Mobile is also a SpaceX customer. Its T-Satellite texting service, which runs on Starlink, launched in July 2025 and comes included on T-Mobile’s top plans. Everyone else, AT&T and Verizon customers included, can add it for $10 a month with an unlocked, eSIM-capable phone. T-Mobile’s exclusive U.S. deal for the service was due to expire in July, satellite analyst Tim Farrar said in June, which frees SpaceX to court AT&T and Verizon. Verizon already offers free satellite texting through Skylo on some newer phones.

How SpaceX is building Starlink Mobile

SpaceX has had a busy month at the FCC. On Oct. 6, the agency cleared it to deploy up to 15,000 next-generation satellites built to connect directly to phones. Two days later, SpaceX announced a deal to buy up to 14 MHz of paired 800 MHz spectrum nationwide from Grain Management, which the Wall Street Journal valued at about $8 billion. T-Mobile had sold those same licenses to Grain in August for $2.9 billion in cash and Grain’s 600 MHz licenses. Low-band airwaves like these travel farther and get through walls more easily than higher frequencies, and SpaceX says most phones already support the band. The purchase still needs FCC approval.

On Oct. 21, the FCC also approved SpaceX’s purchase of three Tristar licenses in the 1,695-1,710 MHz band, covering parts of eight states, and waived the usual requirement to build land-based networks on them.

Starlink Mobile already has more than 22 million monthly users worldwide through partner carriers. SpaceX’s own U.S. service has already slipped once. CFO Bret Johnsen said Sept. 14 that it would launch in the first half of 2028, later than the end-of-2027 target the company gave in August.

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SpaceX plans to pair its satellites with ground-based radios. “We will basically leverage the real estate from Starlink installs and other towers,” Shotwell said on the Oct. 20 call. Goldman Sachs analysts estimate a tenant pays roughly $50,000 a year per tower. At that rate, 80,000 sites would cost about $4 billion a year in rent before equipment and other costs.

Read More: Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?

The carriers’ CEOs play down the threat

“It’s not something that gets done overnight,” AT&T CEO John Stankey told analysts on Oct. 21, before the tower report surfaced, adding that a competitive network takes “a lot of years and a huge level of investment.”

T-Mobile CEO Srini Gopalan, in a Financial Times interview published before SpaceX’s Aug. 4 earnings call, asked, “What is the gap in the market that they’re looking to serve?” Verizon CEO Dan Schulman told a Goldman Sachs conference on Sept. 9, a month before the Grain deal, that he does not see satellite “as a viable competitor in the medium and even longer term.” After the spectrum deal, Verizon spokesman Rich Young told Reuters that spectrum without a network to use it is “just empty airwaves.”

Musk has argued the reverse. On SpaceX’s Aug. 4 earnings call, he said a Starlink network would “probably” offer “better and higher bandwidth than what is currently available from cellular providers.”

Could a SpaceX phone network lower your bill?

SpaceX hasn’t published pricing or a coverage map for Starlink Mobile, and its own U.S. service is still more than a year away.

Prices fell during part of the four-carrier era. From December 2009 to September 2015, the Bureau of Labor Statistics price index for wireless service dropped 13% while overall consumer prices rose 10%. T-Mobile claims some of the credit. Gopalan told the FT that its low prices in the 2010s “stopped AT&T and Verizon from ripping people off.”

What happened after the market shrank to three is disputed. Finnish research firm Rewheel concluded that U.S. prices stopped falling or fell much more slowly after the Sprint deal, while economists Thomas Hazlett and Robert Crandall found the data consistent with gains for consumers.

Recent prices have been jumpy. BLS data show wireless service prices rose 5.9% in August, the category's largest one-month increase on record. Economists tied the August jump to price increases at AT&T and T-Mobile, including AT&T hikes of up to $20 a month on some older plans. The agency also changed how it measures wireless prices starting with July 2025 data.

What it could mean for telecom stocks and dividends

For investors, Oct. 23 was the second selloff this month. On Oct. 9, the day after SpaceX announced the spectrum deal, Verizon fell 8.75% for its worst day since 2002, T-Mobile dropped 13.27% and AT&T lost 9.81%. AT&T had also slipped after its Oct. 21 results, which showed postpaid phone growth slowing and churn ticking up even though the company beat profit estimates and raised its 2026 outlook. Tower owners have moved in the opposite direction, and Bloomberg reported that Crown Castle is among the companies in talks with SpaceX.

Income investors often hold telecom stocks for their dividend payouts. AT&T pays 27.75 cents a share each quarter, about a 5.3% yield at its $20.93 close on Oct. 23. Verizon pays 70.75 cents a quarter, about 6.3% at its $44.66 close. T-Mobile raised its quarterly dividend 15% to $1.17 a share in September, yielding about 3.2% at its $146.54 close. A high yield after a selloff can also signal investor worries about the business behind it.

UBS analyst John Hodulik called a Starlink wireless build an “overhang” for AT&T, Wall Street shorthand for a worry that weighs on a stock, but expects SpaceX to need time to scale up.

Verizon reports third-quarter results on Oct. 26 and T-Mobile on Oct. 28, the day before the FCC vote. If you own any of these stocks, weigh this month’s selloffs against why you bought them, and a financial advisor can help you balance the risk against the income.

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Source: “AOL Money”