04.05.17

Et tu, Robert?

Posted in Financials, LightSquared, Operators, Regulatory, Spectrum at 9:48 am by timfarrar

Is it too soon to ask whether another trip to the bankruptcy court is now a possibility for Ligado? Pressure is growing from all sides for Ligado’s proposed changes to its spectrum plans to be turned down by the FCC, culminating in yesterday’s op-ed in The Hill by former FCC Commissioner McDowell.

He noted that back in 2010 “the FCC pivoted away from physics and toward politics in making an ill-conceived decision that fundamentally endangered aviation safety and the operation of vital military equipment” and suggested that “Ligado…hasn’t changed its tactics, is pushing hard and is hoping today’s policymakers have short memories. It won’t succeed.” Most importantly, he states “the essence of the science behind their arguments hasn’t changed: Ligado’s plan still causes harmful interference to already-licensed neighbors such as satellite services providers, NOAA’s weather service and the aviation industry.”

It is particularly ironic that McDowell is adopting such an strident tone, when he served as an expert witness for LightSquared’s special committee and testified in the first bankruptcy confirmation hearing back in March 2014 that he believed the FCC will approve LightSquared’s applications by the end of 2015. He was quoted at that time as stating:

“The issues have been before the FCC for a long time. We’re almost two years away from the end of 2015, and that is more than ample time to come up with technical solutions. One component of their decision is resolution of this bankruptcy, it will be a huge issue off the checklist for the FCC. Once that’s behind us, the commission will act with alacrity.”

However, he’s not the only heavyweight opponent that Ligado is facing, with the American Meteorological Society and the American Geophysical Union urging the (previous) Secretary of Commerce back in December “to encourage the FCC to reject Ligado’s sharing proposal [for the 1675-80MHz band] outright without establishing a further FCC Notice of Proposed Rulemaking on this matter.”

Iridium has also shifted its position, from one of negotiating a compromise with Ligado over the uplink band to now telling the FCC that “Iridium’s technical analysis makes clear that a Ligado terrestrial network is virtually certain to cause substantial interference to Iridium users” so “absent an agreement in which Ligado sufficiently modifies its proposed ATC operations to avoid interference with the long-established Iridium services in the adjacent band, the Commission should deny Ligado‚Äôs effort to convert its operations in the 1627.5-1637.5 MHz band to a terrestrial wireless broadband service.”

Finally, by all accounts, last week’s Department of Transportation workshop for its Adjacent Band Compatibility (ABC) study was a train wreck for Ligado, with the DOT taking a very hard line on avoiding any possibility of interference, no matter how unlikely, and thereby insisting on extremely onerous power limits for Ligado’s operations, while Ligado continued its Sisyphean task of criticizing the 1dB C/N0 interference limit, which all other parties insist on using.

Moreover, last Friday Ligado filed an ex parte with the FCC indicating that for the 1526-1537MHz band “applying the model developed in consultation with the FAA and other stakeholders to potential tower sites has produced power ranges of 9 to 13 dBW EIRP” compared to the 32dBW Ligado originally proposed in its license modifications. Thus even if Ligado could resolve its issues with the DOT (which could ultimately restrict the transmitted power to an even lower level), the FAA model will make this part of the spectrum band at best only usable for small cells, and severely limit its value to any purchaser.

In summary, all the major components of Ligado’s potential spectrum portfolio now face significant challenges:

1) the FAA will severely limit the power levels in the 1527-37MHz downlink band, and the DOT may further constrain (or even effectively block) these operations;

2) the Earth science community is working to block an auction of the 1675-1680MHz NOAA spectrum, which is integral to Ligado’s other downlink band (1670-1680MHz);

3) Iridium is attempting to block use of the 1627.5-1637.5MHz uplink band which would be paired with 1670-1680MHz; and

4) The remaining uplink band (1647-1657MHz) is too close to 1670-1680MHz for it to be effectively paired (so it would only be used for the 1527-1537MHz low power downlinks).

So its quite plausible that the Reuters article a few weeks ago about Ligado hiring Goldman Sachs and PJT Partners to “consider a potential sale or new investment,” which were immediately followed by widespread rumors about whether DISH could buy into Ligado, was an attempt to boost Ligado’s credibility before all this bad news emerged.

But where do we go from here? Ligado still has some available cash, which could last well into next year, and permit the lobbyists to continue their work. However, unlike under past administrations, it may no longer be possible to just put off a difficult decision, because Chairman Pai has recently pledged that the FCC will follow Section 7, and supply an answer on petitions or applications for a new technology or service within one year. Ligado’s application and petition were put on public notice on April 22, 2016, so it is entirely possible that we could now see a yes or no ruling from the FCC within the next three weeks.

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