03.16.11

Field of dreams

Posted in Financials, ICO/DBSD, LightSquared, Operators, Regulatory, Spectrum at 7:20 pm by timfarrar

Back in the 1990s, the oft-repeated mantra from proponents of the Iridium, Globalstar and ICO projects, when asked where they would find subscribers and investors, was “build it and they will come“. Unfortunately, this Field of Dreams approach didn’t quite work out, when between them these projects lost over $12B of investors’ money.

It now looks like Phil Falcone may end up playing the role of another character from the film, and an even better known resident of Chisholm, Minnesota, Archibald “Moonlight” Graham, whose claim to fame is that he never managed to get a chance to bat in his only appearance in Major League Baseball.

At Satellite 2011 today, the consensus of industry observers and regulatory advisers alike was that GPS interference issues are likely to render much of LightSquared’s L-band spectrum unusable for years to come, as I noted last night. As a result, it is very hard to see where we go from here in terms of LightSquared’s network buildout, even if the plan was fundable.

UPDATE: LightSquared appears to be hinting that it plans to announce a network sharing deal with Sprint next week at CTIA. Though this would be an interesting development, it is a far cry from the planned deal with MetroPCS, which could have potentially ensured an ATC buildout in the 2GHz band. LightSquared would still have to raise the money to fund the buildout, and this will still cost billions of dollars, not least because Sprint only has the right to deploy majority owned spectrum (such as from Clearwire) on its leased towers (unless new agreements are struck with the tower owners). If GPS interference issues render much of LightSquared’s spectrum unusable, it will also be much harder to offer adequate security for any new fundraising.

After Harbinger’s unsuccessful attempt to gain control of DBSD, it may now prove difficult if not impossible to access the 2GHz spectrum. With MetroPCS apparently also unwilling to publicly announce its partnership with Harbinger, it appears more plausible that MetroPCS would decide to team up with DISH than to continue the pursuit of TerreStar in conjunction with Harbinger. As a result, it seems ever more probable that there may never be a LightSquared terrestrial network, and Mr. Falcone may have lost his chance to bat in the major league of mobile operators.

1 Comment »

  1. TMF Associates MSS blog » Who to sue? said,

    January 24, 2012 at 8:53 pm

    [...] I for one had already blogged about the potential extent of the GPS interference issues in January 2011, based on testing that I had been told about by a major equipment manufacturer. In that case the engineers were so astonished by LightSquared’s proposed power levels that they brought in their personal car and handheld GPS receivers and noted considerable interference many hundreds of meters away from the test transmitter. As a result this company had already concluded that (at the very least) use of the upper band spectrum was infeasible, well before the loan was sold to investors, and it can hardly have been long after that before LightSquared started negotiating with Inmarsat over the revised spectrum plan which was signed on April 25. Indeed my discussions with many knowledgeable people in mid-March (at the Satellite 2011 conference) indicated that everyone (including people with connections to LightSquared) already believed that use of the upper band would never be feasible. [...]

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