The Carriers Want to Own the Pipe

The headline writes itself: three phone companies that have spent years competing for customers just announced they want to jointly own the wholesale pipe that every satellite provider must use to reach those same customers.

AT&T, T-Mobile, and Verizon said May 14 they agreed in principle to form a joint venture for direct-to-device satellite connectivity, pooling spectrum to create what analysts describe as a wholesale buying cartel for satellite capacity. The announcement was light on details: no name, no definitive agreements, no funding structure, no signed contracts. It was a press release, not a deal. (AT&T press release)

The tell is exactly that. As SpaceX vice president of satellite policy David Goldman put it on X: "There is no definitive agreement yet, which is the tell." Goldman was quoting an analysis from research firm Lightshed Partners that asked the obvious question: will the Justice Department allow three high-margin competitors to coordinate their satellite purchasing at the exact moment a new rival is preparing to enter? (SpaceNews)

SpaceX President Gwynne Shotwell was less diplomatic. "Weeeelllll, I guess @Starlink Mobile is doing something right!" she wrote on X. "It’s David and Goliath (X3) all over again — I’m bettin’ on David :)" (SpaceNews)

The carriers dispute the framing. They say they’re solving dead zones. And they are — but the structure of the solution reveals their intent. According to NewStreet Research analysts, the JV "will act as a D2D intermediary, buying capacity on a wholesale basis to resell to the individual carriers." Raymond James analysts described it as more likely a "marketing agent" linking carriers with smaller providers. Either way, it positions the JV as the mandatory middleman for any satellite operator wanting to reach US phones. (SpaceNews)

Here is the part the press release omitted: AT&T and Verizon are already invested in AST SpaceMobile, a rival D2D provider planning to launch services this year. T-Mobile already has a partnership with SpaceX to offer Starlink Mobile to its customers. All three carriers have been quietly funding the satellite builders. Now they want to jointly control the purchasing. (PCMag)

Amazon spent $10.8 billion acquiring Globalstar last month. SpaceX is acquiring spectrum from EchoStar to upgrade Starlink Mobile with potential 150Mbps download speeds, up from the roughly 4Mbps currently available. Both companies are building fast — and the carriers want to be their biggest customer and their only distribution channel. (PCMag)

FCC Chair Brendan Carr has said he wants at least three facilities-based satellite-to-phone providers in the market. The carriers’ JV may be the fastest way to ensure that when the dust settles, all three providers are selling through the same wholesale entity the carriers control. SpaceX sees it differently: three competitors moving in parallel as a new rival enters is the kind of pattern that raises real collusion concerns. (PCMag)

The deal may not survive antitrust review. It may not survive the negotiation of actual contracts. Starlink Mobile doesn’t exist in commercial form yet and the licensing terms for SpaceX’s satellite-to-phone service could change once the upgraded network comes online next year. But the intent is clear, and the companies announced it in a press release rather than filing it with regulators — meaning they wanted the narrative set before the lawyers started arguing.

This is not a story about rural coverage. It is a story about who owns the pipe.