> How does the FCC have jurisdiction?

Because of its regulatory authority over commercial sstellites; the operator of these satellites applied to the FCC for approval and was denied because they did not meet safety (detectability by certain instruments) requirements.

> but still not sure how FCC is even the right entity to handle this.

It's the “right entity” because of the responsibility assigned to it by Congress. Whether Congresd should have given that responsibility to some other agency is, perhaps, a valid question, but fairly distant from the immediate case.