01.25.11

Take it from the top

Posted in Financials, LightSquared, Operators, Regulatory, Spectrum at 9:04 pm by timfarrar

It has now been revealed that the FCC is poised to announce the approval of LightSquared’s waiver application on Wednesday, enabling its wholesale partners to “provide wireless broadband access without also having to sell satellite service”. The FCC is also suggesting that “LightSquared would be a new competitor and entrant into mobile broadband with new sources of capital…”, apparently confirming my supposition yesterday that the FCC would not approve the waiver without some reassurance that LightSquared “does have (or shortly will have) the partners and funding to move forward”. Indeed the Wall St Journal is already speculating that LightSquared will now be able to “lease its airwaves to wireless companies like T-Mobile”.

This announcement certainly may come as a surprise to some observers, but I’ve noted before that LightSquared has friends in high places, and this time the direction appears to have come right from the top, with the President announcing in his State of the Union address this evening “a National Wireless Initiative to provide 98 percent of Americans access to high-speed Internet…nearly doubling the amount of wireless spectrum available for mobile broadband (through incentive auctions and other mechanisms to ensure spectrum is used more efficiently)”. Of course authorizing LightSquared’s waiver is not necessarily compatible with promoting incentive auctions, explaining why the FCC apparently does not plan to propose these for the 2GHz band at this point in time. As a result, I still wonder whether this approval will end up becoming a political football for opponents of the recent FCC net neutrality decision.

The most critical long term issue here is whether LightSquared’s potential interference issues with GPS can be solved. Sources I have spoken to, involved in recent testing, suggest that existing GPS receivers (including those built into almost every new cellphone) may be vulnerable to overload interference within several hundred meters of ATC base stations, with older receivers faring the worst. This is why there might still be a problem even if LightSquared can easily fit filters to its own 4G handsets when these are sold, not to mention the potential cost implications if “more expensive” (and potentially more bulky) filters must be added to hundreds of millions of GPS devices and cellphones sold in North America each year. These issues are presumably what the NTIA was referring to when expressing its concerns about the implications of 40,000 ATC base stations being deployed (although given that the number of base stations has been known since March 2010, it remains a mystery why apparently no-one thought to test for this problem until the last few weeks). Is this a big enough issue for LightSquared to become “the great GPS killer“? Only time will tell on that front, but some news about LightSquared’s “new sources of capital” (note the plural!) should emerge very soon, now that the FCC has decided to support LightSquared’s request.

1 Comment »

  1. TMF Associates MSS blog » It’s academic… said,

    May 1, 2013 at 4:28 pm

    [...] I guess at least from that point of view it was successful for MSV’s then-management, because Falcone proceeded to commit a further $600M in the following seven months to complete and launch the MSV satellites, presumably taking advice from his due diligence advisers (who I’m told specialized in analyzing “fast food restaurants”). My guess is that by the time the GPS problems became apparent to Harbinger, all their money had been spent, so all that was left was to persuade other hedge funds to put their money in alongside Harbinger’s and try to keep up the pretense that all was well. After all, LightSquared’s CEO repeatedly told investors that GPS was not a problem, so that more money could be raised, when it was clear to me and others that was simply not the case. [...]

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