The effort raises questions about conflicts of interest for Musk's business empire and the future of a $2 billion contract awarded in 2023 to Verizon Communications Inc. to upgrade the critical infrastructure, according to the people, who weren't authorized to speak publicly.

Musk approved a shipment of 4,000 Starlink terminals to the FAA last week for the initiative, said one of the people. One terminal has already been installed at the FAA's air-traffic control technology lab in Atlantic City, New Jersey, for testing, the person said.

The person familiar with the matter said the program will be called TDM X. The goal is to have the entire program fully functional within 12 to 18 months.