LightSquared Over the Hump?

As we reported last week, LightSquared had been testing possible remedies to a looming GPS interference problem. Today, LightSquared outlined what the operator is calling a “comprehensive solution” to the interference issues.

As part of its proposed solution, the company will no longer launch its network in a 10 MHz chunk of its spectrum that tests showed caused interference with many GPS receivers. Instead, LightSquared said it recently reached an agreement with Inmarsat, the satellite company that controls an alternative 10 MHz block of spectrum in the L Band, to gain access to a lower spectrum band sooner than it initially anticipated. This new block is located further away from the GPS frequencies.

“Test results show this lower block of frequencies is largely free of interference issues with the exception of a limited number of high precision GPS receivers that are specifically designed to rely on LightSquared’s spectrum,” the company said in its press release.

Further, as part of this revised plan, LightSquared will modify its FCC license to reduce the maximum authorized power of its base-station transmitters by over 50%. This action will limit LightSquared to the power it was authorized to use in 2005.

LightSquared says that this new plan will provide the operator with enough spectrum to serve its growing customer base for the next several years. LightSquared will use this time to work closely with the FCC and the NTIA, as well as the relevant U.S. government agencies and commercial GPS users to explore mitigation possibilities and operational alternatives.

“This is a solution which ensures that tens of millions of GPS users won’t be affected by LightSquared’s launch,” said Sanjiv Ahuja, chairman and CEO of LightSquared. “At the same time, this plan offers users a clear path for LightSquared to move forward with the launch of a nationwide wireless network that will introduce world class broadband service to rural and underserved areas which still find themselves on the wrong side of the digital divide.”

The jury is still out if the operator’s proposed solution fully addresses concerns from the GPS industry and U.S. governmental agencies, and if the solution also will still enable LightSquared to develop a comprehensive, nationwide 4G network.

In related news, LightSquared is reported to have sent letters to its shareholders with details of a deal in development with Sprint Nextel. According to Bloomberg, Sprint Nextel has reportedly reached a 15-year network-sharing deal with LightSquared worth approximately $20 billion, where Sprint and LightSquared will build LightSquared’s nationwide network, and Sprint will be a wholesale user of LightSquared.

This may have implications for companies in the cable industry. The arrangement will allow the LightSquared 4G wholesale network to be jointly deployed nationwide. Comcast, Bright House, Time Warner Cable and Cox all have an interest in Clearwire, Sprint’s WiMAX 4G venture, or Sprint directly.

For Clearwire this represents a question moving forward. LightSquared plans to provide nationwide 4G LTE capabilities, while Clearwire is a 4G WiMAX network. Will the networks compete for customers? Will there be a co-mingling?  How will this development affect the cable interest?

For more on LightSquared’s last-minute GPS interference solution, see this press release.

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