- Verizon Communications Inc. (VZ) shares hit intraday low as the FAA considers canceling or modifying a $2 billion contract, with a decision looming by Friday that could involve SpaceX taking on some responsibilities.
- Elon Musk claims SpaceX is sending Starlink terminals to the FAA at no cost to address a failing system, amid ongoing tests in Atlantic City and Alaska to enhance air traffic control connectivity.
- The FAA’s deliberation highlights a modernization push complicated by potential conflicts of interest tied to Musk’s influence, leaving Verizon’s role uncertain as the agency balances innovation and reliability.
Shares of Verizon Communications Inc. (VZ) dipped to $42.89 following a Bloomberg report that the US Federal Aviation Administration is nearing a decision on a $2 billion contract awarded to the company in 2023. The FAA is contemplating cancellation or a partial shift of responsibilities to SpaceX, with a resolution possibly arriving by Friday. This development reflects the agency’s urgent need to modernize the national airspace system’s aging infrastructure, a challenge complicated by technological and political factors.
Elon Musk, SpaceX’s leader, has entered the fray, announcing via X that Starlink terminals are being sent to the FAA at no taxpayer cost to address what he calls a rapidly deteriorating system originally under Verizon’s purview. The FAA has confirmed testing Starlink technology, as per the report, with one terminal in Atlantic City and two at non-critical sites in Alaska, aiming to improve connectivity and weather data at remote locations. Musk’s move positions SpaceX as a potential key player in upgrading air traffic control networks, though it raises questions about conflicts of interest given the FAA’s regulatory oversight of his company and his ties to the Trump administration.
To be clear here, the Verizon communication system to air traffic control is breaking down very rapidly. The FAA assessment is single digit months to catastrophic failure, putting air traveler safety at serious risk.
The Starlink terminals are being sent at NO COST to the… https://t.co/B3XOFZerJB
— Elon Musk (@elonmusk) February 27, 2025
Verizon, a telecommunications stalwart, faces uncertainty as the FAA weighs its options. The stock’s drop to intraday lows signals market jitters over the contract’s fate, which could see Verizon sidelined or sharing duties with SpaceX. The agency’s spokesperson emphasized that no decision is final, highlighting the fluid nature of the deliberations. Bloomberg noted that neither Verizon nor SpaceX responded to inquiries, and FAA representatives have yet to address Musk’s claims of an emergency deployment.
The situation underscores a broader tension between established providers and innovative disruptors. The FAA’s trials with Starlink suggest openness to satellite-based solutions, yet the decision will hinge on balancing reliability, cost, and efficiency. As the agency nears its deadline, the outcome will shape not only air traffic control but also how government navigates technological transitions. For now, the focus remains on ensuring a resilient airspace system, with Verizon’s legacy and SpaceX’s ambition hanging in the balance.
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