By Paul Kruczkowski, Editor
LightSquared’s plans to become a major player in the broadband wireless 4G-LTE market were derailed Tuesday when the National Telecommunications and Information Agency (NTIA) sent a letter to the FCC indicating that there is no practical way, at this time, to mitigate the potential interference that the terrestrial component of LightSquared’s network would cause to existing GPS service. The FCC subsequently pulled the conditional waiver it granted LightSquared in January 2011 and indefinitely suspended the company’s terrestrial service.
The FCC also issued a public notice inviting comments on the NTIA letter through March 1, 2012; however, it is unlikely that any favorable comments on LightSquared’s behalf will cause the commission to reverse its decision, for a couple of reasons. First, the FCC has made it clear that harmful interference to GPS would not be permitted and that approval of commercial operations would be conditional on LightSquared proving that the interference issues were resolved. To this point, despite making many changes to its original plan, LightSquared has been unable to do so.
Second, opponents of the FCC’s January 2011 waiver are many and powerful. The Department of Defense (DOD) and the Federal Aviation Administration (FAA) have testified that the LightSquared network could disrupt government GPS and flight safety systems. The Coalition to Save Our GPS has been a loud voice of opposition to the waiver in Washington, and its members include GPS manufacturers, airlines, parcel shippers, and farm equipment manufacturers.
The impact of this week’s FCC decision reaches far beyond the doors of LightSquared. As I alluded to in a previous article, LightSquared has already signed numerous multi-billion dollar agreements for network design, deployment, and operation, as well as at least 30 customer agreements. The most notable customer is Sprint-Nextel, whose 4G-LTE roadmap could be seriously affected by LightSquared’s demise. Also at risk are the additional bandwidth, nationwide coverage (thanks to the satellite component of LightSquared’s network), and wireless industry competition that LightSquared’s entry into the market once promised.
LightSquared clearly has not thrown in the towel yet and it will do everything it can to salvage its $4 billion dollar investment, but unless a last-minute miracle solution presents itself, Lightsquared’s bid to become the nation’s first wholesale, integrated wireless broadband and satellite network is in serious jeopardy. It seems unlikely that the solution will come in LightSquared’s current spectrum. Even though LightSquared’s terrestrial signal technically doesn’t transmit in the GPS band, the relative magnitude of its signal is so large in comparison with the nearby GPS signal that it overloads the GPS receiver, making the two are services inherently incompatible. And even if a technical solution can be found, it must also be one that can be practically implemented, given the number of GPS units in use today. This appears to be a long shot, at best.
An alternative solution would be for LightSquared to find new spectrum for its network. However, no currently available spectrum has been identified for broadband wireless use, leaving LightSquared with only military spectrum for a possible deal. An agreement could be difficult to reach, now that the value of LightSquared’s spectrum is only a fraction of what it was when it had FCC approval. In addition, I expect that opposition to such a deal would be fierce from LightSquared’s competitors.
My biggest question is: How did things get this far? LightSquared acquired the satellite spectrum and decided to apply for the waiver to use it for ground based signals. Did they understand how difficult it would be to mitigate the effects of these signals on GPS receivers and the danger it presented to its business plan? Or was it a case where the potential financial rewards overruled the practical engineering risks?
(I have been in my share of business meetings over the years, so it’s not hard for me to imagine the principal engineers in the room saying: “It’s a really bad idea to move ahead with this plan. The interference problem is almost impossible to fix and prohibitively expensive, and the filtering solution would be much larger than the device you are trying to protect.” The reply: “This opportunity is so huge we can’t pass it up. We have plenty of time and money. We’re smart. We’ll figure it out.” The engineers shake their head and walk out of the room...)
What about the FCC? Where did the regulatory process break down? Why did the FCC grant LightSquared the waiver in the first place, if they couldn’t adequately show that the network could coexist with GPS? How does the FCC allow a company to spend $4 billion before determining they should revoke the waiver?
What do you think? Share your thoughts below.