Don’t mess with GPS!

Posted in Financials, LightSquared, Operators, Regulatory, Spectrum at 12:24 pm by timfarrar

Over the last week, a clearer picture has begun to emerge of LightSquared and the GPS industry’s respective strategies, as interference tests continue in Las Vegas. Some data is now emerging from these tests, with a GPS World webinar this morning citing that in a rural test case (see presentation), high precision receivers were impacted up to 1800m from the base station (although the radius of interference would obviously be less for narrowband GPS receivers and for more urban environments with higher levels of clutter).

Given that the problem is mainly caused by transmissions in the upper channel (Phase 0 spectrum) closest to the GPS frequencies, LightSquared is already indicating that it will offer to operate only below 1545MHz, until the FCC introduces receiver standards and old GPS equipment is phased out (a process that will take many years to complete). As Jeff Carlisle of LightSquared commented in a May 23 Space News article: “If the most efficient and fair solution is not to do a receiver-side solution, we haven’t taken any of the possible transmission solutions off the table. We can look at ways of implementing our service, how we do it, when we do it, using what spectrum”. Indeed LightSquared has just paid Inmarsat another $40M to speed up the availability of the Phase 1A spectrum, and moved back its commercial deployment timeline into the first half of 2012 for precisely this reason.

However, as problems have emerged with the testing in Las Vegas, it appears that the GPS industry will demand that significant additional testing must be carried out, before LightSquared is given permission to launch commercial service even in the lower part of the band. As Alan Cameron of GPS World put it on this morning’s webinar, LightSquared does not have the full software [needed to operate its base stations in the way it plans to do commercially] so the current testing is premature. A letter sent to the FCC last week, signed by 33 senators, even asks the Commission to “rescind LightSquared’s waiver until this demonstration [of non-interference with GPS] is made”. Of course, as everyone should know, a demonstration of total “non-interference” is impossible.

Next week we should expect to see more data on the government’s testing of interference in New Mexico, based on the charter of the National Space-Based PNT Systems Engineering Forum, which was tasked to produce a final report “in a publicly releasable version” by May 31, 2011. Indications to date are that this testing certainly does not demonstrate “non-interference” with GPS (and the report itself will written by proponents of GPS not LightSquared), so this is likely to intensify the political firestorm aimed at LightSquared and the FCC.

UPDATE: The FAA report is also scheduled to be released on June 3 and, according to a report in FlightGlobal, the conclusions also appear to be problematic for LightSquared, notably a statement that “From an aviation perspective, operations at Phase 0, 1 and 2 spectral deployments, the upper channel [frequencies above 1536MHz] should not be permitted”.

FURTHER UPDATE: The FlightGlobal article has now been taken down, but is still available here and a more complete report on the study is available here. Also the House of Representatives has now passed the National Defense Authorization Act (NDAA), with strengthened language apparently requiring that the FCC should not provide “final authorization for LightSquared operations until Defense Department concerns about GPS interference have been resolved”. If that bill passes the Senate and is signed by the President, then it would seem likely to stop any prospect of near term commercial operations by LightSquared.

Of course, a requirement for more testing and a further delay to LightSquared obtaining permission to commence service (at best) or a withdrawal of the waiver (at worst) could very easily derail the LightSquared venture completely. I’m told that LightSquared had been hoping to raise money from private equity sources and then undertake an IPO in July, after signing a provisional network sharing agreement with Sprint. This new funding is a pre-requisite for Sprint to move forward with any buildout under the network sharing agreement, because of the upfront costs that it would incur, and so Sprint needs to be convinced that LightSquared will be able to reimburse these costs, either with cash or spectrum rights.

With Sprint expected to announce its plans for Network Vision this summer, LightSquared therefore needs to achieve some certainty about its spectrum position very soon, or risk missing that boat. Ominously, at a New America Foundation event in Washington DC two weeks ago featuring LightSquared’s CEO, Sprint noted that it would be able to host other spectrum on its Network Vision platform, including “possibly Clearwire, possibly public safety”, but conspicuously failed to include LightSquared on that list.

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