03.12.11
Posted in ICO/DBSD, LightSquared, Operators, Regulatory, Spectrum, TerreStar at 1:31 am by timfarrar
Could LightSquared meet its buildout obligations to the FCC without doing any buildout?
Amazingly enough, that could be one potential interpretation of the way in which LightSquared’s March 2010 agreement with the FCC is written.
Condition 2. Without regard to satellite service, SkyTerra shall construct a terrestrial network to provide coverage to at least 100 million people in the United States by December 31, 2012; to at least 145 million people in the United States by December 31, 2013; and to at least 260 million people in the United States by December 31, 2015. For purposes of this Condition 2, “terrestrial network??? shall mean the network comprised of: (a) SkyTerra’s L-band spectrum used by its terrestrial network; (b) other terrestrial spectrum that Skyterra is the licensee of or has access to under a spectrum manager lease or de facto transfer lease and deploys to provide the coverage and level of service requirements described in the paragraph 6; and (c) any other terrestrial spectrum that is used by SkyTerra’s terrestrial network or is made available to SkyTerra for pooling with its spectrum and that SkyTerra deploys to provide the Coverage and level of service requirements defined in paragraph 6. “Spectrum that is used by SkyTerra’s terrestrial network??? means spectrum that is licensed to or controlled by a party other than SkyTerra that has been incorporated into the infrastructure of SkyTerra’s terrestrial network.
The only additional requirement is that this buildout “must be capable throughout the coverage area of providing speeds to end users at least at a level commensurate with deployments of terrestrial networks using “fourth-generation??? (“4G???) technologies, such as the 3GPP Long Term Evolution (LTE) or Worldwide Interoperability for Microwave Access (“WiMAX???) standards”. Thus LightSquared is entitled to count towards its obligations any buildout by Airspan in the 1.4GHz spectrum (under their agreement last August) or by Open Range (as announced yesterday) in what is most likely the 1670-75MHz terrestrial spectrum block that LightSquared also controls.
Most significantly, if Harbinger can strike a deal with MetroPCS this weekend, to make a joint bid for the TerreStar and DBSD spectrum, then any LTE buildout in the 2GHz band (presumably under a “spectrum pooling” agreement) could also be counted towards these obligations. Even if a buildout in the 2GHz MSS spectrum did not take place, then MetroPCS has its own LTE buildout in the AWS band and has expressed an interest in entering into a roaming agreement with LightSquared, which could potentially be counted as “other terrestrial spectrum that is used by LightSquared’s terrestrial network” depending on how the agreement was structured.
Once you realize that MetroPCS already has about 97M covered POPs (although not all of them yet have LTE) and that OpenRange was intending to cover 6M POPs (with an option to grow to 12M POPs) under its original agreement with Globalstar, it becomes pretty clear that LightSquared might be able to meet its December 31, 2012 deadline for covering 100M POPs without building out any of its own network coverage. Though that would probably not be the case for the buildout requirements in subsequent years, this highlights that Harbinger might well be able to find a way around LightSquared’s looming deadline next year, even if it isn’t able to fund a large scale deployment in the near future.
As a result, I’ll be very interested to see what happens with MetroPCS, Harbinger and Solus this weekend. DBSD stated on Friday evening that it expects to receive a bid “later today or over the weekend” and will file a report on Monday “to designate the leading bidder”. It seems the exact details of how any agreement with MetroPCS is structured could prove critical to where we go from here.
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03.11.11
Posted in Financials, Globalstar, ICO/DBSD, LightSquared, Operators, Regulatory, Spectrum, TerreStar at 11:48 am by timfarrar
He came from a hardscrabble background, rising to prominence along with his flamboyant wife, who became a favorite of the tabloids. After raising hundreds of millions of dollars, his unstinting efforts to bring essential resources to millions of people in remote areas attracted the interest and favor of political leaders and government agencies alike.
No, its not the story of Phil Falcone, but the autobiography of Bob Geldof. After today’s announcement of a deal with Open Range, something that other MSS-ATC proponents openly scoffed at when Open Range signed its original deal with Globalstar, I’m also left asking “Is that it?”.
Its worth recalling that the prior spectrum lease contract between Open Range and Globalstar called for annual spectrum lease payments which in the first six years were projected to range from $0.6M to $10.3M, something that is little more than a Band Aid in the context of Harbinger’s $2.9B investment in LightSquared. I’m therefore left with the distinct impression that LightSquared intended to announce a much bigger deal with MetroPCS, as I suggested yesterday, but it has not yet been possible to reach agreement over a joint bid on the 2GHz MSS spectrum.
Given the pressure to reach a deal on any bid for the DBSD spectrum before the next hearing on Tuesday March 15, and DBSD’s intention to announce its preferred bidder the day before, we will have to wait and see if a MetroPCS deal can be struck over the next three days, or if Mr. Falcone will be the one left singing “I Don’t Like Mondays“.
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03.10.11
Posted in Financials, ICO/DBSD, LightSquared, Operators, Regulatory, Spectrum, TerreStar at 1:24 pm by timfarrar
It now appears that Harbinger may very shortly announce a change to the LightSquared business plan to focus first on development of its ATC network in the 2GHz band, through a joint $2.6B bid with MetroPCS and Solus for the DBSD and TerreStar spectrum. This could allow it to mitigate the growing chorus of opposition to its plans for deployment of an L-band network, including planned testimony by Trimble to Congress tomorrow (Friday).
Over the last month, LightSquared has been gradually changing its tune, from initially suggesting that Garmin’s tests were simply flawed, to admitting that there “may be some interference to GPS signals which…may require modification to some existing GPS units” to now conceding that some GPS receivers may need to be replaced.
As I’ve also noted over the last week, a partnership with MetroPCS has become increasingly likely, with a deadline for bids in the DBSD case of Tuesday March 15. On a very similar timeline, on Monday March 14 LightSquared will provide its response to the numerous Petitions for Reconsideration of its L-band ATC waiver that have been filed with the FCC.
UPDATE: I understand that LightSquared has not yet sealed the deal with MetroPCS. Given the upcoming deadlines, it may be a very busy weekend in Reston.
Assuming that Harbinger is able to pull together a bid for the 2GHz spectrum, I would expect LightSquared to propose that if it is given permission to build out its terrestrial network initially in the 2GHz band (with an associated waiver of the ATC gating requirements), it will take more time to resolve the GPS interference issues in the L-band. Because the key issue for GPS interference is that many existing GPS devices will be overloaded by the LightSquared signals within its own licensed spectrum (as opposed to LightSquared’s signal spilling over into the GPS band), a logical compromise would ultimately involve an order from the FCC that GPS devices sold after a certain date (say the end of 2012) will need to include filters that can prevent overload interference, while LightSquared will not operate at the upper end of the L-band spectrum until some time after this (perhaps 2014 or beyond), so that existing GPS devices can be replaced.
If MetroPCS funds the buildout of a 2GHz LTE network in its own coverage areas, then this may be largely sufficient to meet LightSquared’s initial buildout milestone of 100M POPs covered (although perhaps with a modest delay to the current objective of the end of 2012). Though there has been much talk about a deal between LightSquared and Sprint, it seems that the initial 2GHz buildout may not rely on that possibility. LightSquared and Harbinger would then presumably hope that something turns up, whether in the shape of a deal with Sprint, or something else, to fund the rest of the nationwide buildout in 2013 and beyond. Although details may not emerge for some time, it also seems plausible that LightSquared could eventually seek to renegotiate its Cooperation Agreement with Inmarsat, on the basis that Regulatory Changes have made it impossible for LightSquared to secure the originally planned benefits of the deal in the L-band.
Of course, if Harbinger only ends up with a minority stake in a 2GHz spectrum venture, and is unable to exploit the L-band spectrum to any significant degree in the next few years, then this would be a significant come down from its original plans. However, with MetroPCS potentially funding the initial rollout, this would push the problem of where LightSquared is going to get the cash to pay for a multi-billion dollar national network down the road by at least two years, allowing Harbinger to hope that spectrum values and data demand will grow enough for it to recover its $2.9B investment in the L-band and fund the rest of the nationwide buildout at that point.
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03.08.11
Posted in Financials, ICO/DBSD, LightSquared, Operators, Regulatory, Spectrum, TerreStar at 10:09 am by timfarrar
But if you try sometimes you might find
You get what you need
With news emerging about early stage talks between Sprint and T-Mobile over a potential combination of the two companies, or some other deal involving Clearwire, it now looks less likely that either Sprint or T-Mobile would be willing to move ahead with any partnership with LightSquared in the near term. However, Harbinger looks rather better positioned with MetroPCS, whose CFO recently described LightSquared as “a wonderful option for us”. MetroPCS has also just raised an additional $1B for “opportunistic” acquisitions of “nationwide” (i.e. MSS) spectrum.
Harbinger and Solus have to formalize their bid for DBSD by no later than March 15, in order for it to be considered as a realistic alternative to the current bid from DISH. In addition, TerreStar Networks’ exclusivity period to propose its own reorganization plan is currently scheduled to expire on March 9, opening up the possibility for Harbinger and Solus to submit their bid for TerreStar at that point.
Given these tight timelines, Harbinger and Solus may now have to move forward in partnership with MetroPCS (assuming a deal can be struck for a joint bid) in an attempt to buy DBSD and TerreStar. The structure of such a venture might not include LightSquared’s L-band operations, given the high value that Harbinger has placed on those assets, plus its (GPS interference) risks and liabilities (to Inmarsat for the L-band spectrum lease). Indeed if Harbinger did ultimately move forward with a separate 2GHz joint venture (based on much cheaper spectrum), it seems more likely that Harbinger would instead seek to distribute its holdings in LightSquared to investors requesting redemptions.
However, clearly Harbinger, Solus and MetroPCS would hope that the FCC will provide a similar waiver of the ATC gating criteria to that recently granted to LightSquared. Whether or not the buildout of a 2GHz terrestrial network then took place in conjunction with LightSquared’s buildout (through the sort of spectrum pooling/network sharing arrangement that has been discussed in the past between LightSquared and TerreStar) would presumably depend on whether and when the L-band GPS interference issues are resolved.
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03.03.11
Posted in Financials, Inmarsat, LightSquared, Operators, Regulatory, Spectrum at 3:52 pm by timfarrar
It now appears that Harbinger is focusing its energies on the 2GHz MSS band, with the potential assistance of MetroPCS in its $2.6B bid for DBSD and TerreStar. It is therefore interesting to note that LightSquared has a largely unrecognized way to get out of its spectrum agreement with Inmarsat if the uncertainty created by GPS interference makes it impossible to fund that deployment. According to the Cooperation Agreement filed with the SEC in December 2007, either party could terminate the Agreement if a “regulatory change” makes it impossible to renegotiate in a way that maintains “the benefit of the bargain”.
Section 7.3 Regulatory Change. Without limiting any specific provision herein to the contrary, if any court or federal, state or local government authority or international body with jurisdiction orders or takes any action which becomes effective and which requires the termination or material modification of this Agreement to comply with such action or otherwise with Applicable Law (a “Permissibility Determination???), the Parties shall use their respective best efforts to renegotiate this Agreement in good faith and recast this Agreement in terms that are likely to cure the defects caused by the Permissibility Determination while maintaining the benefit of the bargain to the Parties hereunder and to return a balance of benefits to the Parties comparable to the balance of benefits provided by the Agreement in its current terms and otherwise in a manner consistent with this Agreement. If the Parties are unable to recast this Agreement in a manner that cures such defects and otherwise is mutually agreeable to the Parties, this Agreement will terminate, subject to Section 7.4, effective on such date as the Parties’ activities are required to terminate pursuant to the Permissibility Determination.
Section 7.4 Force Majeure. If any Party is affected by Force Majeure it shall immediately notify the other Parties of the nature and extent of the Force Majeure event. No Party shall be deemed to be in breach of this Agreement, or otherwise be liable to another Party, by reason of any delay in performance, or non-performance, of any of its obligations under this Agreement to the extent that such delay or non-performance is due to any Force Majeure of which it has notified the other Parties and the time for performance of that obligation shall be extended accordingly. Each Party shall use its reasonable efforts to minimize the effects of or shorten the duration of any Force Majeure event and resume the performance of its obligations under this Agreement as soon as possible. If the Force Majeure in question prevails for a continuous period in excess of one hundred eighty (180) days and prevents any Party from carrying out any of its material obligations hereunder (which for the avoidance of doubt shall without prejudice to the generality of the foregoing include any obligation to pay money in excess of $1,000,000, any obligation to issue stock and any obligation to implement any Spectrum Plan), the Parties shall enter into bona fide discussions with a view to mitigating its effects, or to agreeing upon such alternative arrangements as may be fair and reasonable and failing agreement on the same within a further 90 days, any Party may unilaterally and in its absolute discretion terminate this Agreement with immediate effect by notice in writing to the other Parties.
Although Harbinger has invested a great deal in LightSquared to date, it is facing a major battle over GPS interference issues in the L-band. Indeed LightSquared now apparently “concedes there may be some interference to GPS signals which…may require modification to some existing GPS units”. If these problems cause a significant delay in its ability to roll out a terrestrial network in the L-band, it looks like LightSquared would have strong grounds to at least suspend its agreement and payments to Inmarsat, while it focused on rolling out an alternative terrestrial network in the 2GHz spectrum. Of course that would presumably require a waiver from the FCC to allow terrestrial-only devices, similar to the waiver LightSquared was granted in the L-band just a few weeks ago, but at this stage it wouldn’t be a surprise if the FCC came up with such a deal “to save GPS”.
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03.02.11
Posted in LightSquared, Operators, Regulatory, Spectrum at 4:42 pm by timfarrar
The GPS interference testing conducted by Garmin and submitted to the FCC in January has received widespread publicity due to the “disastrous jamming” it predicted for aeronautical and in-car navigation devices. However, details have now emerged of testing conducted by LightSquared which showed much less of a problem for three smartphones.
The two studies have a number of similiarities (e.g. both conclude that the amount of interference that is needed to make the signal is unusable is about 10dB SNR degration) but come to quite different conclusions about how far from the LightSquared base stations this interference will be experienced. Assuming that the base station power levels at a given distance are equivalent to those given in Figure 1 of the Garmin test (which may be disputed by LightSquared, given that the LightSquared test uses a different setup with two 10MHz channels at 1526-1536MHz and 1545-1555MHz while the Garmin test uses a single 5MHz carrier at 1550-1555MHz), the cellphones would only lose the signal at 100-200 meters from the LightSquared base station, not 1100 meters as the Garmin in-car navigation device did. Obviously this could dramatically reduce the extent of the interference problem.
Indeed we’ve heard from third parties that their own tests showed interference would be experienced “at least several hundred meters away” from a base station, perhaps implying that the real world impact will be somewhere between the LightSquared and Garmin tests. However, it also seems plausible that different devices will have vastly disparate levels of susceptibility to interference, because they use different chipsets, filters, etc. For example, GPS World has highlighted that high-precision GPS users are expected to be disproportionately affected because their devices use a wideband front-end which allows more noise to be received. LightSquared filed a testplan last Friday which notes that one of the next areas to be decided is to “Select the categories of receivers and receivers to be tested” prior to the first progress report to the FCC on March 15 and so it will be interesting to see how wide a range of receivers are to be tested.
In the meantime, the GPS industry is mounting a concerted campaign to overturn the LightSquared waiver and a number of petitions for review have already been filed. One allegation that is common to most of these submissions is that the waiver went beyond the scope of the International Bureau’s delegated authority, and should only have been decided by the full Commission (which would potentially require further comment as well as open any ruling up to Congressional review). LightSquared’s reponse is expected on March 14, with reply comments due on March 29. As a result, there will be a great deal of activity on both fronts over the next four weeks.
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02.11.11
Posted in Financials, Inmarsat, LightSquared, Operators, Regulatory, Spectrum at 1:57 pm by timfarrar
“Waiting for a train to go or a bus to come,
Or a plane to go or the mail to come,
Or the rain to go or the phone to ring,
Or the snow to snow
Or waiting around for a Yes or No
Or waiting for their hair to grow.
Everyone is just waiting.”
(Dr Seuss, Oh! The Places You’ll Go)
This week we’ve seen news that Clearwire is apparently abandoning its retail strategy, “opening the door for additional investment in the struggling company by Sprint Nextel Corp.” Clearwire is also now suggesting that it “has enough funds to continue operating through the end of the year”, reducing the drumbeat of articles that have recently suggested a deal with T-Mobile would come before the end of the first quarter.
We’ve also seen Harbinger selling its remaining 14% stake in Inmarsat, which also suggests that no partner announcement is imminent from LightSquared, otherwise the sale would presumably have been delayed until after that announcement. This is because Inmarsat’s share price would have been boosted by the confidence in LightSquared’s future that such an announcement would create, and so Harbinger could then have got a better price for its shares. (By way of comparison, LightSquared announced additional funding immediately before selling the first half of its Inmarsat shareholding back in October).
All this points to T-Mobile maintaining the stance, set out in its investor day presentation last month, that it does not have a pressing need to acquire more spectrum, and by implication can wait until later this year before making a decision. In that context, Clearwire and Harbinger’s actions could be interpreted as seeking to demonstrate that they will have sufficient funding to wait for T-Mobile’s decision.
Yesterday the President also indicated that he will press for more spectrum to be auctioned, which may well include the release of the 1755-1780MHz government spectrum that could be paired with the AWS-3 block, and would likely be one favored option for T-Mobile. By waiting until later this year, T-Mobile could also see if there is an opportunity to make use of the 2GHz MSS spectrum, and with the cable companies apparently not seeing much success from their wireless offerings, SpectrumCo might also be more open to a sale of its 20MHz of AWS-1 spectrum.
In the meantime, we’re seeing more attempts to discredit LightSquared, apparently designed to prompt further enquiries by Republicans in Congress. This is likely to turn more attention towards the interference issues created by the LightSquared network, and though Inmarsat has maintained that it “is confident that the effects on [Inmarsat] customers will be minimal”, I understand that view is not shared universally within the MSS community or apparently within the Department of Defense.
I wonder how the FCC feels at this point in time, as it waits for LightSquared to announce how it plans to move forward, assuming that (like me and the “two industry officials” cited in a February 7 Space News article) it expected the announcement of partners to come almost immediately after the waiver was granted. The FCC’s language already appears to have shifted slightly, from stating that “LightSquared would be a new competitor and entrant into mobile broadband with new sources of capital…” when it granted the waiver in late January, to indicating this week that LightSquared “deserves every opportunity to succeed”. Let’s hope for the FCC’s sake that it does, and soon, before there is any problem meeting the “Unique Terrestrial Buildout Obligations” cited by the FCC to justify grant of LightSquared’s waiver.
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02.05.11
Posted in Financials, ICO/DBSD, LightSquared, Operators, Regulatory, Spectrum, TerreStar at 10:19 am by timfarrar
Sometimes when trying to understand Harbinger’s actions, I feel like I don’t just live in another city, but I’m from another planet altogether. That’s certainly the case with the latest revelation, that LightSquared “may bid” for TerreStar and DBSD. Just a few months ago, Harbinger was suggesting that “TerreStar is no longer critical to Falcone’s master plan”, so what has changed now?
Presumably Harbinger would say that TerreStar’s “spectrum holdings would help LightSquared handle wireless traffic” because there is so much demand for capacity on LightSquared’s network. Yet LightSquared is still to announce its wholesale partners, and 40MHz of spectrum seems to be enough for Verizon and AT&T to build out their own LTE networks (in the 700MHz and AWS-1 spectrum). Especially with this development coming immediately after the concerns about GPS interference, it is inevitably going to raise questions about whether LightSquared might be unable to use all of its L-band spectrum, even if, when all is said and done, the interference issues are not a major problem. (However, it is certainly the case that LightSquared is not expected to have access to its full 40MHz of L-band MSS-ATC spectrum until the end of July 2013, 30 months after it gave the Phase 2 notice to Inmarsat).
Harbinger’s move also raises the profile of the 2GHz spectrum band as an alternative source of spectrum for potential partners like T-Mobile and highlights that this spectrum is much less expensive than the cost basis of LightSquared’s L-band holdings.
Finally, its not even clear where the money would come from for a purchase of TerreStar and DBSD or whether the FCC would allow it, given the concerns they expressed last March that “Harbinger’s acquisition of SkyTerra does pose some risk of anticompetitive harm for users of MSS in the near future” (due to its existing minority ownership stakes in Inmarsat and TerreStar). Thus, while Harbinger’s intervention might be an attempt to cause more trouble in the DBSD and TerreStar bankruptcies, I wonder if in the end this will do more harm than good to LightSquared’s prospects?
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02.01.11
Posted in Financials, ICO/DBSD, LightSquared, Operators, Regulatory, Spectrum, TerreStar at 8:42 am by timfarrar
“I have heard there are troubles of more than one kind.
Some come from ahead and some come from behind.
But I’ve bought a big bat. I’m all ready you see.
Now my troubles are going to have troubles with me!”
(Dr Seuss, I Had Trouble in Getting to Solla Sollew)
I commented last week that the waiver granted to LightSquared risked causing additional trouble in the TerreStar and DBSD bankruptcies, which could potentially be to Harbinger’s advantage, because it could limit the competition that LightSquared will face from the 2GHz MSS spectrum holders in the race to secure key partners like T-Mobile and MetroPCS.
Today it has been announced that DISH has agreed to acquire DBSD for $1B. In conjunction with TerreStar, which is also valued at roughly $1B in its bankruptcy, this creates the opportunity for potential partners to consider using a rival 40MHz block of 2GHz MSS spectrum instead of investing in LightSquared or Clearwire. The FCC’s LightSquared ruling last week, laid out a roadmap for the 2GHz players to gain the same waiver (i.e. to sell terrestrial-only devices), namely committing to a national terrestrial rollout with strict deadlines, and settling the ongoing dispute with Sprint over clearance costs for the 2GHz band. If both of these conditions were satisfied, it is now hard to see how the FCC could refuse to grant a similar waiver.
I’ve noted before the challenges of achieving a high spectrum valuation in the current situation of oversupply. Now in addition to the Clearwire spectrum, apparently valued at “up to $2B” for 40MHz of spectrum, we may also have an even more direct comparison of 40MHz of MSS-ATC spectrum also valued at around $2B.
This makes the $2.9B that Harbinger has invested to date in LightSquared look quite expensive, especially when considering that LightSquared must pay Inmarsat for its Phase 2 spectrum lease on an ongoing basis (amounting to a future liability of more than $2B). It will therefore be very interesting to see which way T-Mobile and other cellular operators decide to go now and whether this new development pushes back the decision point for any key potential partners.
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01.28.11
Posted in Financials, LightSquared, Operators, Regulatory, Spectrum at 5:27 pm by timfarrar
Over the last few days, a new series of filings by the US GPS Industry Council have appeared in the LightSquared ATC waiver docket, making some fairly dramatic statements about the potential for interference from LightSquared’s ATC network. As an aside, it is rather curious that these filings didn’t appear to be available when I was writing about this issue on Monday (Jan 24), despite the fact that some of the submissions were received by the FCC as early as January 19.
The January 20 USGPS Industry Council filing includes an analysis by Garmin International of potential interference scenarios for a “very common” consumer automotive navigation device (the nüvi 265W) and a Generation Aviation GPS receiver (the GNS 430W) based on LightSquared supplied parameters for network operations using a 5MHz LTE downlink channel between 1550MHz and 1555MHz. The conclusion of the analysis is that the LightSquared network “will create a disastrous interference problem for GPS receiver operation to the point where GPS receivers will cease to operate (complete loss of fix) when in the vicinity of these transmitters”. Specifically, the report states that “the nüvi 265W lost a fix at a distance of 0.66 miles (1.1km) from the transmitter”, while the GNS 430W “will be completely jammed by LightSquared transmitters over 5.6 miles (9.0km) away”.
The study that has now been mandated by the FCC’s Order is tasked with “identifying near-term technical and operational measures that can be
implemented to reduce the risk of overload interference to GPS devices, and providing recommendations on steps that can be taken going forward to permit broadband wireless services to be provided in the L Band MSS frequencies and coexist with GPS devices.”
However, these instructions make it clear that the aim of the study is to decide how rather than whether to provide terrestrial broadband wireless in the L Band MSS frequencies, and note that “Because the GPS interference concerns stem from LightSquared’s transmissions in its authorized spectrum rather than transmissions in the GPS band, the Commission expects full participation by the GPS industry in the working group and expects the GPS industry to work expeditiously and in good faith with LightSquared to ameliorate the interference concerns.”
One possibility for “ameliorating the interference concerns” is that LightSquared could be required to use L-band downlink channels which are further away from the GPS band than the originally intended 1550-1555MHz channel. However, LightSquared is intending to use 20MHz of downlink, so it will need to operate up to at least 1550MHz and quite likely somewhat higher if it is to operate four 5MHz LTE channels (because the 1544-45MHz band is reserved for safety services so only 3x5MHz channels could fit into the 1525-1544MHz part of the band, and it is possible there will have to be some guard band between the bottom of LightSquared’s fourth channel and the 1544-45MHz safety services). LightSquared might also have additional limitations placed on its operations in the vicinity of airports (e.g. no use of the fourth channel there), while GPS manufacturers could be required to use improved filters in the future, so that their receivers are better protected. However, it will take many years before the billions of dollars worth of existing GPS devices reach the end of their lifetimes, and LightSquared needs to be providing widespread service under its current rollout mandates by the end of 2012 (albeit not on four channels, because Inmarsat will not make the Phase 2 lease spectrum available until mid 2013).
As a result, it will be very interesting to see how the two sides of this debate can be reconciled. Conceivably a worst case for LightSquared might be that it would only be able to operate its ATC network below 1544MHz (i.e. with just three paired 2x5MHz terrestrial LTE channels). In that case, it is far from clear whether LightSquared would be able to renegotiate its lease with Inmarsat to give up 10MHz of the roughly 18MHz it is now committed to leasing under Phase 2 of the Cooperation Agreement. If LightSquared continues to pay the full $115M per year to Inmarsat, then any requirement to limit terrestrial operations to only 30MHz of ATC spectrum would have a fairly dramatic impact on the residual value of LightSquared’s own spectrum assets.
Nevertheless, it seems that the FCC is determined to make sure that the L-band MSS spectrum will be used for terrestrial services and appears to have concluded that LightSquared’s plan is the only possibility for that to happen in the foreseeable future. Thus, channeling Dr. Seuss (who I’ve noted before, had many great insights into the MSS industry), the FCC message to LightSquared seems to be:
“And will you succeed?
Yes! You will, indeed!
(98 and ¾ percent guaranteed.)”
Now, let’s just hope that any remaining GPS interference doesn’t end up resulting in a slight variant on Dr Seuss’s original story:
“You can get so confused that you’ll start in to race
Down long wiggled roads at a break-necking pace
And grind on for miles across weirdish wild space,
Headed, I fear, toward a most useless place.
And if you go in, should you turn left or right…
Or right-and-three-quarters? Or, maybe, not quite?
Or go around back and sneak in from behind?
Simple it’s not, I’m afraid you will find,
For a GPS system to make up its mind.”
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