Elon Musk's space company has asked the US government for permission to begin testing on an ambitious project to beam internet service from space, a significant step forward for an initiative that could create another major competitor to telecom companies.

The plan calls for launching a constellation of 4000 small and cheap satellites that will beam high-speed internet signals to all parts of the globe, including its most remote regions. Musk has said the effort "would be like rebuilding the internet in space."

'A passing grade is 100 per cent every time': Elon Musk, founder of SpaceX and Tesla Motors. AP

If successful, the attempt could transform the L.A.-based SpaceX from a pure rocket company into a massive high-speed internet provider that would take on major companies in the developed world but also make first-time customers out of the billions of people who are currently not online.

The idea of saturing Earth with internet signals from space has long been the dream of prominent business tycoons, including Bill Gates in the 1990s. But many of these ventures have run into obstacles that Musk is working to avoid. Musk has his own rocket, and he has said his swarm of satellites will be more efficient and inexpensive than relying on a handful of big devices that are difficult to replace.

The SpaceX Dragon commercial cargo craft is grappled by a robotic arm at the International Space Station. NASA

Internet service providers have for years relied on a few older satellites that are cast much farther into space and can only serve specific regions or countries. SpaceX's web of satellites would wrap around Earth in low orbit, handing off internet signals to each other to make connections more reliable and to reach more areas.

The filing, made with the Federal Communications Commission late last month, is the first public glimpse into how Musk will move ahead with the project.

Musk isn't the only billionaire entrepreneur who is pursuing such an idea. Virgin's Richard Branson has partnered with a company with similar ambitions. Both ventures would have to succeed where many have failed.

Musk's FCC filing proposes tests starting next year. If all goes well, the service could be up and running in about five years.

The satellites would be deployed from one of SpaceX's rockets, the Falcon 9. Once in orbit, the satellites will connect to ground stations located at three US facilities. The purpose of the tests is to see if the antenna technology used on the satellites will be able to deliver high-speed internet to the ground without hiccups.

Despite a history of failed satellite ventures, wealthy individuals and companies are pouring fresh funds into exploring satellite-based communications. Google and Fidelity recently invested $US1 billion into SpaceX, in part to support the satellite broadband internet project.

A company called OneWeb, backed by Virgin's Branson and founded by Greg Wyler, has similar ambitions: "OneWeb's mission is to bring the entire world online to improve quality of life and spur economic and national development where it's needed most," Wyler has said.

Wyler was also involved in launching O3b Networks, which already has 12 satellites in space, providing internet to 40 customers, including Royal Caribbean International, the Republic of Congo and the Papua New Guinea University of Technology, an O3b spokeswoman said.

Some analysts say that while the technology appears promising, the basic logistics are difficult to overcome. In the mid-1990s, Teledesic, a company funded by Bill Gates, legendary wireless executive Craig McCaw and a Saudi prince, tried to employ a similar plan to use low-Earth orbiting satellites to provide internet access. But costs ballooned to more than $US9 billion, and the venture ultimately collapsed.

The new space entrepreneurs are proposing technology that is smaller, built in-house and therefore cheaper to operate, industry officials say.

"Some people might say the idea of satellite broadband has come and gone. But the cost structure of the business is so much better than when Bill Gates tried it," said Paul Gallant, analyst at Guggenheim Partners, an investment firm. "I think Musk's track record of disruptive innovation would make this a really attractive business for the ... FCC to support."

SpaceX declined to comment for this article beyond the public document of its plans. The FCC declined to comment, saying the application is currently under review.

In January, at a private event to recruit engineers to work at a new satellite design and manufacturing plant in Redmond, Washington, Musk predicted that SpaceX's system would reach remote regions and handle up to 10 per cent of internet traffic in urban and suburban regions. His remarks were videotaped by someone in the audience and posted on YouTube.

It would also be a "real enabler for people in poorer regions of the world," Musk said, though he later conceded that SpaceX would need permission from countries to operate the service, a process that could be difficult, if not impossible.

Over the last several years, SpaceX has moved from a spunky startup with a seemingly outlandish goal of colonising Mars to a disruptive competitor that has remade the rocket launch business. It became the first commercial space company to fly supplies to the International Space Station. Last year, it won a separate contract to fly astronauts there by 2017. And the Pentagon recently qualified the company to compete for lucrative missions to launch national security satellites into orbit.

SpaceX's main goal remains flying people to Mars, because in order to survive, Musk thinks, humans must become a "multi-planetary species."

"Mars is going to need a global communications system, too," he said in his January remarks. "A lot of what we do developing Earth-based communications can be leveraged for Mars as well, as crazy as that may sound."

Washington Post