The FAA may cancel a $2.4 billion contract with Verizon, $VZ, and instead give it to Starlink
FAA May Drop Verizon for Musk’s Starlink in $2.4 Billion Deal
Elon Musk could soon secure another $2.4 billion government contract, as the Federal Aviation Administration (FAA) considers shifting a critical air traffic control system overhaul away from Verizon and handing it to Starlink, according to a report by The Washington Post.
The FAA told The Independent that "no decisions have been made", but reports suggest the agency is "close to canceling" Verizon’s contract in favor of Musk’s satellite company.
Verizon’s Contract Under Threat
Verizon was awarded the contract in 2023 to modernize the communications network used by U.S. air traffic control. However, Musk has criticized the system as outdated and in urgent need of an upgrade.
"The Verizon system is not working and is putting air travelers at serious risk," Musk wrote on X Monday.
Verizon has not yet commented on the potential contract loss.
FAA Testing Starlink as Alternative
The FAA confirmed it is currently testing Starlink at facilities in Atlantic City and Alaska, noting that discussions about using Musk’s company for remote air traffic control sites have been ongoing "since the prior administration."
Conflict of Interest Concerns
Musk’s dual role as both a senior government figure and a business leader has raised ethical concerns.
"Who’s looking out for the public interest when the person cutting FAA budgets and personnel is also set to benefit from another government contract?" said John P. Pelissero, director of the Santa Clara University Ethics Center, in an interview with The Washington Post.
As Musk continues to expand his government contracts, critics are questioning whether his influence is reshaping federal priorities to favor his own businesses.