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Investing.com-- The Federal Aviation Administration is considering canceling a $2.4 billion contract with Verizon Communications Inc (NYSE:VZ), to upgrade key communications infrastructure, in favor of Elon Musk’s Starlink, the Washington Post reported on Wednesday.
The FAA is close to canceling the contract, the Washington Post report said, citing people briefed on the plans.
The report comes just a day after the FAA confirmed it was testing Starlink terminals to support the national airspace network. The FAA had initially contracted Verizon for a similar endeavor, as it looks to upgrade critical communications infrastructure.
But a contract awarded to Starlink, which is a unit of Musk’s SpaceX, could raise questions about a potential conflict of interest for the Tesla Inc (NASDAQ:TSLA) CEO, who was seen gaining increasing influence in the Donald Trump administration.
A team of employees from SpaceX was seen working with the FAA in recent days, social media posts from an employee showed.
Musk has also personally criticized Verizon over its FAA contract, claiming that the system was “not working,” and was putting air travelers “at serious risk.”
Musk is leading an effort within the Trump administration- called the Department of Government Efficiency- to slash government spending, and has outlined measures to either defund or dismantle several federal agencies.