Thus the only question that really matters is what the MSS-ATC spectrum (whether L-band or 2GHz band) is worth right now. Some will argue that 40MHz of L-band spectrum (with explicit flexibility but possible interference risks) is not worth $5B (or whatever value Harbinger is currently prepared to accept). Some will argue that 40MHz of 2GHz band spectrum (with the potential for flexibility under a somewhat unclear set of conditions) is worth more than $2B. Others will argue both.

The challenge for achieving greater value in the 2GHz band is that any potential bidder has to consider the (unpredictable) risk of how the FCC will rule with regard to flexibility, buildout conditions, merger of DBSD/TerreStar, acquisition by an existing wireless operator, etc. and if necessary be prepared to follow through with litigation, appeals to Congress, etc. That risk is magnified by the lack of a consistent precedent to follow (viz Globalstar and LightSquared).

Also, it seems that a company like T-Mobile would be far more interested in a direct spectrum acquisition via a network lease at the L-Band.
[TMF: I think this intended to say "T-Mobile would be far more interested in a direct spectrum acquisition at 2GHz versus a network lease at the L-Band"]
T-Mobile already has the core network in place in most markets, and would simply require additional spectrum in the markets with higher population densities to support additional capacity/LTE. Leasing capacity on another network whose forward and reverse links are not easily supported without new user terminals does not seem logical. On the other hand, the 2Ghz MSS spectrum can/is already supported in some currently produced cellular baseband chipsets.

We believe that there is substantial operational and network efficiencies in combining the 2Ghz MSS spectrum (Terrestar/DBSD) under a single company. Hence, there will be competitive forces to attempt to make that combination a reality, and those that will attempt to prevent it from occurring.

ORBITRAX

It is also clear that the NPV of the Inmarsat lease and clearance costs is at least another $2B ($115M + 3% p.a. discounted at 8% = NPV of $2.3B, plus clearance costs and other equity contributions totaling ~$370M). As such this expenditure and future obligation is well above the combined ~$2B valuation currently put on DBSD and TerreStar in their bankruptcies.

Given the FCC’s “policy standards”, there is little question as to the validity of Globalstar’s decision to seek foreign sponsorship through the ANFR.

As far as the “Unique Terrestrial Buildout Obligations” go, nothing that a quick Waiver Extension or STA won’t solve. They won’t even have a “Global Financial Meltdown”, to blame their “delay in funding” on. No “Force Majeure”, No AWOL Thrusters. After all, Lightsquared does “deserve every opportunity to succeed”.

As you alluded to yourself earlier…. “Friends in High Places”

We would also suggest that the GPS interference debate may be a dissuading unresolved factor in any long term relationship with Lightsquared. You can just imagine the News headlines of potential “life threatening” incidents being blamed on the lack of GPS availability due to Lightsquared terrestrial transmitters. If spectrum is such an abundance as you note. Then why would any operator accept these kinds of “unresolved” liabilities with such an agreement.

On the other hand, the 2Ghz MSS Spectrum looks much more like a “Slam Dunk” for streamlined terrestrial repurposing, which would likely lack the “interference overhang” of portions of the the L Band. Falcone appears to now turn his attention back to the 2Ghz MSS band, but there appear to be several interested parties, and the price will likely be no where near the discounted prices he paid for Skyterra. We would suggest that the 2Ghz MSS spectrum could become quite a spectacle, as one might expect one party would want both the DBSD/Terrestar allocations to provide paired 20Mhz FDD functionality. Likewise, there may be other interested parties in attempting a to prevent a “single company” appropriating both 2Ghz MSS licenses. The number of companies interested in the 2Ghz MSS spectrum repurposed for terrestrial use might be numerous i.e. T-Mobile, MetroPCS, Lightsquared, DISH, etc.

ORBITRAX