07.05.11

Building a network or a legal case?

Posted in Financials, ICO/DBSD, LightSquared, Operators, Regulatory, Spectrum, TerreStar at 10:07 pm by timfarrar

I noted 10 days ago that one possible outcome for LightSquared would be for the company to sue the US government and/or FCC if it was unable to move forward because of the GPS interference issues. Last week’s Technical Working Group report submission was accompanied by a very strongly worded set of recommendations by LightSquared blaming the GPS industry as “it is inescapable that their disregard for the Commission’s policies regarding the immunity of receivers to transmissions in nearby frequency bands that is the source of the technical problem”.

This set of recommendations served to deflect from the results of the TWG itself, which highlighted widespread interference and the difficulties in mitigating this even under LightSquared’s revised plan. However, it also may act as something of a red rag to a bull, in terms of Congress’s reaction if the FCC does allow LightSquared to move forward. Of course, if Congress did act to ban LightSquared from operating, then that would provide a much more definitive trigger for any legal action by LightSquared (compared to a move by the FCC to delay any decision or postpone authorizing LightSquared’s operations until more testing is carried out).

On the other hand, while the FCC is still considering whether to give LightSquared the go ahead, it seems unlikely that we will see more overt legal threats. Indeed, the FCC’s deliberations about how to treat LightSquared are especially sensitive because it seems that some blame for the interference problems could very well attach to the FCC, given its apparent failure to live up to the commitments made in the 2005 ATC Order:

While we agree with the GPS Industry Council, NTIA, and other government agencies that it is essential to ensure that GPS does not suffer harmful interference, it is also important to ensure that new technologies are not unnecessarily constrained. In this regard, we recognize that the President’s new national policy for space-based positioning, navigation, and timing (PNT) directs the Secretary of Commerce to protect the radio frequency spectrum used by GPS and its augmentations through appropriate domestic and international spectrum management regulatory practices . . . . Furthermore, the President’s PNT policy calls for the establishment of an inter-agency Executive Committee, on which the Chairman of the FCC will be invited to participate as a liaison, and a National Space-Based PNT Coordination Office. It is our intention to establish discussions with other agencies, through the PNT Executive Committee and Coordination Office as appropriate, to better understand what protection levels for GPS are warranted. The results of those discussions may lead to future rulemaking proposals in order to ensure that all FCC services provide adequate protection to GPS, and produce a more complete record upon which to establish final GPS protection limits for MSS ATC
licensees

Since the release of the TWG report, LightSquared has been attempting to highlight other signs of progress, including raising $265M of additional funding today. However, it seems that the vast majority of this new funding is likely to have been in the form of Harbinger having to stump up its previously unfunded $250M commitment to LightSquared. Harbinger also seems to be experiencing some internal turmoil, and it will be very interesting to see what has happened at the end of the second quarter in terms of redemptions. Most problematically, with the FCC comment and reply period on the TWG report now extending until August 15, and indications that the FCC will not rush to judgment after that, it appears more likely that Sprint will announce details of its Network Vision plan before it has been determined whether LightSquared is able to move forward or not.

In parallel with this activity, it seems we may know more about DISH’s plans for DBSD and TerreStar relatively soon, as comments are due on Friday in the 2GHz spectrum consultation. After Charlie Ergen met with the FCC Chairman on June 22 to discuss matters including DISH’s recent 2GHz MSS spectrum acquisitions, it now seems ever more likely that DISH could provide a readily available alternative source of spectrum for prospective LightSquared partners.

2 Comments »

  1. Ellen Forsythe said,

    July 13, 2011 at 3:01 am

    Please, please keep up this blog; this provides the best analysis and commentary on the LightSquared issue I have seen. I’ve been telling my customers “stop trying to make LightSquared happen, it isn’t going to happen” for at least a year now and nobody listens.

    Also, any thoughts on the BGAN market? I’m cautious on Inmarsat these days.

  2. timfarrar said,

    July 19, 2011 at 2:36 pm

    With respect to the questions on Inmarsat, the most important factor for their outlook is what happens in the maritime market, where my sense is that things seem to be somewhat better than many have feared. BGAN is unlikely to be an engine of growth going forward.

    Of course in the short term, news on LightSquared will be a significant factor in perceptions of Inmarsat. What seems to be underestimated is the possibility of an outcome in which the L-band is never useable for terrestrial services, because regulators refuse to permit services that could interfere with GPS. Some seem to think that if LightSquared goes away, another terrestrial partner will eventually come along for Inmarsat. However, if LightSquared loses this battle with the GPS community, it is hard to believe anyone will ever be able to try the same thing in the L-band in the future, whether in the US or elsewhere.

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