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Why a Crucial FCC Vote Could Cause Headaches for Elon Musk’s SpaceX

The Federal Communications Commission (FCC) will today vote on an order that could cause trouble for the satellite plans of Elon Musk’s SpaceX by threatening their economic viability.

SpaceX wants to create a massive, $10 billion constellation of more than 4,400 communications satellites that would beam internet coverage around the world. However, it’s not the only company racing to throw thousands of communications satellites into the heavens, with key competitors including OneWeb, Telesat and Boeing.

It’s critical that these systems don’t conflict with one another, nor with the satellites that are already up there, so regulators have to pay close attention to issues around the power of the satellite’s transmissions and the radio spectrum that they use to send and receive information.

SpaceX intends to start its satellite operations over the U.S. before spreading worldwide. However, that raises the question of whose rules it needs to follow: those of the U.S. regulator, or of global regulators.

Musk’s company wants the FCC to be its go-to regulator for its operations around the world. However, the FCC’s proposals state that, outside the U.S., frequency coordination and power issues really need to be handled by the International Telecommunication Union (ITU), an agency of the United Nations.

That would have a major impact on SpaceX, which has been speeding up its satellite launch schedule in order to gain an edge over its rivals domestically. Under FCC rules, the first company to launch its system in the U.S. gets to choose which frequencies it would like to use. SpaceX could win that race if it beats Softbank-backed OneWeb to the punch.

However, the ITU also has a “first come first served” system, and Telesat and OneWeb have already won priority ITU rights for their own satellites in different parts of the world.

According to Bloomberg, the FCC is likely to approve the proposals on Tuesday, as chairman Ajit Pai is in favor. Forced to jockey for position with rivals who are already licensed outside the U.S., SpaceX might now have to restrict the power and frequencies of its system.

Satellite industry consultant Tim Farrar told the publication that this could make it “very difficult or SpaceX to provide an economically viable service outside the U.S.”