LightSquared at an Impasse?
Posted by Steve Fravel on Wednesday, February 15, 2012 · 
Additional information added to this article on Friday, February 17, 2012.
With hints at possible litigation, there is every indication that LightSquared has hit the wall on a Valentine’s Day offering little love. The International Bureau of the FCC revoked the conditional approval LightSquared was granted in January 2011.
The FCC’s move follows an opinion provided to it by the National Telecommunications and Information Administration (NTIA) which opined, “there is no practical way to mitigate the potential interference at this time,” in reference to GPS receivers. NTIA coordinates spectrum use for the military and other federal government organizations.
The FCC’s International Bureau included in its statement the intent to seek public comment on the NTIA findings and conclusion. The FCC also will indefinitely suspend the Ancillary Terrestrial Component granted to LightSquared.
In a statement dated February 14, “LightSquared profoundly disagrees with both the NTIA’s and the PNT (Space-based Positioning, Navigation and Timing) recommendations, which disregard more than a decade of regulatory orders, and in doing so, jeopardize private enterprise, jobs and investment in America’s future.” LightSquared has gone on-record criticizing government testing performed last year to determine if the LightSquared plan could move ahead without interference to GPS receivers. LightSquared goes on to say that it is committed to working toward a resolution to the current interference problems, which they have characterized as poor design and implementation in the GPS industry. LightSquared claims that the interference is caused by GPS receivers “listening to” spectrum in the adjacent LightSquared operating band; interference is not due to spectrum overflow from LightSquared into GPS operating bands.
NTIA indicates in its report that 75% of the general location and navigation devices experienced harmful interference in tests of the LightSquared proposal. The Federal Aviation Administration (FAA) states, “Based on that analysis (testing performed and directed by NTIA), it has become apparent that LightSquared’s planned operation would not be compatible with low altitude aviation operations, including use of GPS for terrain awareness and warning systems.”
FAA Administrator Michael Huerta said in a recent letter to the NTIA, “It is important to note that the mandatory installation of TAWS (terrain awareness and warning system) into U.S. commercial aircraft is considered by many to have made the single greatest impact to improving U.S. commercial aviation safety in the last 20 years.”
NTIA looked into different engineering options as possible remedies to the interference, including the LightSquared antenna height and antenna down-tilt angle configurations. LightSquared indicated that adopting these kinds of requirements would require several billion dollars in additional investment to increase the number of base stations, and that the level of service provided likely would still be insufficient to meet client needs.
It appears then that there are very few options available to LightSquared and Harbinger Capital Partners. Hedge fund manager Phillip Falcone may consider selling off the spectrum, however the asset is reportedly encumbered by $2 billion in liens. In addition, Falcone’s auditors devalued the book value of LightSquared by 47% in 2011. Taking into account the $3 billion invested by Harbinger and Falcone, a fast reversal doesn’t appear to be on the horizon.
LightSquared has indicated in its response to the FCC that it is in for the duration. While experts believe a resolution for the GPS interference issue is likely still at least five years away, officials at LightSquared believe that time can be as little as a year away, and may include swapping spectrum.
In an article published by The Wall Street Journal, discussions between LightSquared and the Defense Department concerning such a swap have been underway since last year. There are reportedly logistical and technical issues to resolve in such a spectrum trade. Such complications combined with regulatory and financial constraints and roadblocks make any potential solution appear to be a long shot at best.
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