LightSquared: Train Wreck Or Light At The End Of The Tunnel?
By Paul Kruczkowski, Editor
Since its inception in July 2010, LightSquared has been on the fast track to becoming a major player in the broadband wireless 4G-LTE market. The privately held company is in the midst of deploying the nation’s first wholesale, integrated wireless broadband and satellite network, which could deliver the additional bandwidth the public craves, the nationwide coverage the government seeks, and real competition an industry dominated by Verizon and AT&T currently lacks. In January 2011, the FCC granted a waiver to LightSquared and its wholesale customers, giving them permission to provide terrestrial wireless broadband services. LightSquared continued full steam ahead on its buildout and rigorous system testing. However, several recent issues have threatened to derail LightSquared’s plans.
The Train Grows, Gathers Speed
Over the last 15 months, LightSquared has entered into many significant agreements and partnerships to make good on its commitment to the FCC to provide wireless broadband coverage to at least 100 million Americans by the end of 2012, and at least 260 million — more than 90% of the U.S. population — by 2015. In July 2010, LightSquared signed a $7B agreement to have Nokia Siemens Networks to provide network design, equipment manufacturing and installation, and operation and maintenance services. Last August, it exercised the first and second phases of an agreement with Inmarsat to re-band its L-band radio spectrum, so that both companies would have more contiguous spectrum available. In July of this year, signed an agreement with Sprint to deploy and operate a nationwide LTE network that hosts LightSquared’s L-band spectrum; the deal also gives LightSquared customers access to Sprint’s nationwide 3G roaming services, and gives Sprint access to additional LightSquared 4G capacity. Just last week, LightSquared announced partnerships with Qualcomm for chipset development and Sharp for smartphones and tablets
A lot of economic activity is taking place surrounding the deployment and operation of LightSquared’s network, and significant financial investments have been made based on the company’s predicted success. In fact, estimates indicate the network will generate more than $14B of private investment over the next eight years.
The Track To Successful Commercial Launch
Successful deployment of the system hinges on final FCC approval for operation, and that will only happen when LightSquared resolves outstanding technical issues related to GPS service interference. The problem is the relatively large signal that the terrestrial component of the network produces on frequencies neighboring the extremely low-level GPS signal centered at 1575.42 MHz, which desensitizes GPS receivers. This can be corrected by reducing the power level of the larger signal, increasing the guard band between the two signals, adding filtering on the GPS receiver input to reject the unwanted signal, or all of the above.
LightSquared has proposed changes to the FCC to help mitigate the interference issue. It plans to use only the lowest 10 MHz centered at 1531 MHz for the terrestrial component of the system. It will initially limit the power on the ground to a level less than -30 dBm. It proposed that GPS timing receivers use narrow band commercial antennas. LightSquared claims these changes will resolve all interference issues except for those related to legacy precision GPS units.
As for legacy precision GPS units, the National Telecommunications and Information Agency (NTIA) last month drafted a letter to the Deputy Secretaries of Defense and Aviation requesting that they work with LightSquared to develop a GPS test plan and update them on current status of testing. This letter was forwarded to the FCC on September 13, and the FCC requested that more testing be done. A week later, LightSquared announced that it had signed an agreement with Javad GNSS Inc. to develop an affordable solution for legacy precision GPS systems and that preproduction units will be available in October for testing.
Possible Derailment?
The biggest obstacle to LightSquared’s planned 2012 system launch is the continuing objection to the plan by the GPS industry. Recently, LightSquared has been very vocal about the lack of action by the GPS industry to help solve the problem. And one could argue that as the spectrum becomes more congested, it would be prudent for the GPS industry to add more input filtering. Historically, however, the entity proposing the new service or rule change has been responsible for mitigating any problems that its introduction causes. From that perspective, LightSquared’s attempt to have the GPS industry shoulder some of the responsibility seems unreasonable. How GPS manufacturers or users can be held responsible for retrofitting receivers affected by LightSquared’s plan?
The high-profile nature of the plan has also attracted attention in Washington. Originally, the need for broadband wireless spectrum had the political winds blowing in LightSquared’s favor. Since the waiver was granted by the FCC, and the scale of the impact on GPS has come to light, lobbying on both sides of the issue has intensified. For examples, GOP lawmakers criticized the FCC for not specifying who will pay for the retrofits, as reported in the Washington Post. The intense political scrutiny of LightSquared’s plan makes one wonder if its future competitors, AT&T and Verizon, are lobbying against final FCC approval. All of this political wrangling will certainly impact the launch of the new service.
These and many other questions will need to be answered in the coming months. Even if LightSquared resolves the technical problems, is its plan in jeopardy now that politics are in play? Has Light Squared done enough by investing in solutions to retrofit timing and high-precision GPS units, or should they be financially responsible for all of the retrofits? If it is forced to pay for the retrofits, can LightSquared raise the money needed to meet those obligations? Finally, now that that the LightSquared train has gained so much momentum — and its success or failure impacts more investors, partners, and jobs — what happens if it is derailed in the eleventh hour? Share your comments below...