The billionaire behind auto-maker Tesla and the SpaceX program is working on the project with satellite-industry veteran Greg Wyler, who spent some time devoted to a similar mission at Google, according to a report in the Wall Street Journal.
Musk and Wyler are trying to devise a feasible and relatively low-cost way to put about 700 satellites, each weighing less than 250 pounds, into orbit to provide wireless Internet anywhere on the planet, the Journal reported.
The satellites would be smaller, more affordable, and more widely deployed than those currently in use commercially, according to the Journal.
Ostensibly, Musk would tap into resources at SpaceX to get satellites into position.
SpaceX's unmanned Dragon spacecraft splashed down in the Pacific Ocean in October carrying a heavy load of Nasa cargo and scientific samples from the International Space Station that experts hope could yield significant results.
Dragon also carried crew supplies, hardware and computer resources.
The SpaceX vessel is the only spacecraft currently capable of returning from the ISS with cargo. Its last mission to the space station was in April.
Nasa lost its ability to reach the space station alone when the shuttle program ended in 2011 after 30 years.
The US space agency has helped fund private companies in the race to restore US access to the ISS.
In 2010, SpaceX became the first private company to send a spacecraft to the ISS.