On Monday, Elon Musk’s SpaceX paid $17 billion for wireless spectrum licenses that most industry veterans would consider worthless. The price works out to $340 million per megahertz. Recent spectrum auctions have averaged between $0.10 and $3.00 per megahertz per capita.

SpaceX paid roughly 100 times the going rate; investors should ask why.

On paper, the deal makes no sense. However, it makes perfect sense if viewed through the regulatory capture lens. EchoStar, drowning in $30 billion of debt and facing an FCC investigation for spectrum warehousing, had little choice but to sell. SpaceX needed a spectrum it could own rather than lease to make its satellite-to-cellular service a genuine threat. In this deal, SpaceX will pay $8.5 billion in cash and $8.5 billion in its own stock, plus $2 billion in interest payments on EchoStar’s debt through November 2027. For EchoStar, this represents a financial lifeline. For SpaceX, it means the cost of admission to America’s wireless oligopoly.

SpaceX didn’t just buy spectrum, but it bought Washington’s blessing, at a price only Musk would pay. The company had been complaining to the FCC since early 2025 that EchoStar was warehousing valuable airwaves while barely using them for actual service. FCC Chairman Brendan Carr responded by launching an investigation in May that threatened to revoke EchoStar’s licenses entirely. Faced with losing the licenses outright, EchoStar cashed out. That sets a precedent that should rattle every other spectrum holder.

As a result, Wall Street got the message. Verizon slipped 2.1%, AT&T 1.8%, T-Mobile 2.4%. The market reaction reflects a simple reality that SpaceX now owns the infrastructure to bypass their networks entirely.

The timing also signals a shift in Washington’s antitrust thinking. Disruption now counts as competition, and rather than protecting terrestrial wireless competition through companies like Boost, the FCC appears willing to accept satellite-based alternatives as sufficient to prevent monopolization. SpaceX’s financial commitment signals confidence in satellite-to-cellular technology that remains largely unproven at scale. The company’s Starlink service generated $11.8 billion in revenue for 2025, representing 58% of SpaceX’s total income. However, direct-to-cell service requires different technical capabilities and faces different competitive dynamics than beaming internet to rural farms.

Industry executives privately question whether satellite-to-cell can match terrestrial network quality in urban markets where carriers make their highest margins. Satellites operate 300 miles above Earth while cell towers sit 100 feet up. That difference matters especially when a dropped call can decide whether a customer stays or leaves. For Musk, this represents another step toward vertical integration across critical infrastructure sectors. SpaceX already controls satellite internet through Starlink and rocket launches through its core business. Combined with his ownership of X and involvement in AI development, Musk is assembling unprecedented control over America’s digital infrastructure.

The deal’s structure suggests SpaceX expects regulatory scrutiny. By paying half in stock rather than cash, the company maintains financial flexibility while giving EchoStar an equity stake in SpaceX’s success. The additional $2 billion in debt service payments effectively makes SpaceX a creditor in EchoStar’s restructuring. Smart.

Traditional wireless carriers now face a competitor with unlimited capital, regulatory favor, and technology that bypasses their most expensive infrastructure investments. The $17 billion SpaceX paid for spectrum represents less than two years of Starlink revenue.

Whether that calculation proves correct depends on execution capabilities that remain untested in terrestrial wireless markets. Musk has a track record of making impossible things work, but wireless technology presents challenges different from those of rockets or electric vehicles.

Musk just paid $17 billion to buy himself a seat at the wireless table. The incumbents may find the bill comes due for them instead.