Another Government Contract: FAA Partners with Elon Musk’s Starlink for Air Traffic Upgrades

The Federal Aviation Administration (FAA) has struck a deal to use SpaceX’s Starlink satellite internet system to modernize its outdated IT networks, a move that’s raising concerns about a potential conflict of interest for CEO Elon Musk. While the exact value of the contract hasn’t been disclosed, SpaceX, which owns Starlink, relies heavily on federal funding, primarily through NASA contracts.

The FAA confirmed the agreement in a social media post Monday night, stating that it has begun testing Starlink terminals at three sites: one in Atlantic City, New Jersey, and two in Alaska. The full rollout is expected to include 4,000 terminals over the next 12 to 18 months, according to Bloomberg.

Transportation Secretary Sean Duffy said he had spoken with Musk about rapidly improving air traffic infrastructure after a deadly crash involving a military helicopter and a regional jet near Washington, D.C.

The contract with SpaceX is drawing scrutiny because Musk isn’t just a businessman, he also holds a government position. As the head of the Department of Government Efficiency in the Trump administration, he’s been pushing for deep cuts in federal spending, including at the FAA.

Musk has openly criticized the FAA’s existing IT provider, Verizon. In a post on X (formerly Twitter), he claimed, “The Verizon system is not working and so is putting air travelers at serious risk.” The FAA already has a contract with Verizon to upgrade its networks.

Musk’s government involvement goes beyond the FAA. His companies—SpaceX, Tesla, and others—are subject to oversight from agencies like the Securities and Exchange Commission (SEC), the National Highway Traffic Safety Administration (NHTSA), and the Consumer Financial Protection Bureau. Over the years, he’s had several high-profile clashes with regulators, even as his businesses have benefited from federal incentives, such as early financial support for Tesla and tax credits for electric vehicle buyers.

Now, his involvement in space exploration is under fresh scrutiny. SpaceX is set to launch a probe this week for AstroForge, a company looking to mine minerals from asteroids. Sound familiar?

As the FAA moves forward with Starlink, the debate over Musk’s dual roles as a government advisor and CEO of companies that depend on federal contracts is unlikely to die down.