09.08.11

Let’s blame the FCC (or maybe Inmarsat?)

Posted in Financials, Inmarsat, LightSquared, Operators, Regulatory, Spectrum at 1:58 pm by timfarrar

There wasn’t much consensus in today’s hearing of the House Committee on Space, Science and Technology about how to solve the LightSquared-GPS interference problem, or even whether this is feasible. However, several Democrat and Republican committee members did seem to agree on one thing, that the government was “somewhat complicit” in this problem, or in other words that the FCC was largely to blame, for not considering the possibility of overload interference when it originally granted LightSquared (then MSV) its ATC license.

Government witnesses presented a united front recommending further testing, with Scott Pace of GWU (as the only non-government employee and therefore not subject to the “mandate from the White House to seek a win-win solution” as Mr Russo put it) going further and suggesting that LightSquared should be banned from operating. Indeed Dr Pace’s testimony, as someone aware of the 2002 discussions between MSV and the GPS Industry Council, was quite definitive in stating that the agreement over out-of-band interference rested on the assurance from the FCC that the L-band would be maintained as a (quiet) satellite band without terrestrial-only use. In that context, one might very well tend to blame Inmarsat for agreeing in the December 2007 Cooperation Agreement with MSV (in exchange for its multi-billion dollar spectrum lease contract) that land-based satellite services would no longer be protected from MSV’s terrestrial operations, thereby facilitating potential deployment of a terrestrial network which would (by design) overload MSS terminals (and as we now know GPS receivers) in the L-band. Of course the FCC was also perfectly willing to go along with this in the March 2010 ruling which approved the changes embodied in the Cooperation Agreement, over the objections of two MSS service providers. However, the GPS Industry Council apparently did not comprehend the implications of this agreement (perhaps because many of the technical and operating provisions were confidential?), although it seems the DoD had at least some understanding of the potential for interference.

During the Q&A for the hearing, LightSquared highlighted on several occasions that the $4B it had (supposedly) already spent on the project was based on the “settled expectations” created by the FCC’s 2003 and 2005 rulings, presumably setting the bar for litigating a compensation claim if its terrestrial buildout does not go forward.

UPDATE: Judging by darkblue‘s comments on the Washington Post write-up, perhaps a “nice fat lawsuit against those attempting to interfere” is exactly what Harbinger now has in mind?

However, not only the government witnesses, but apparently even the committee members themselves, agreed on the need for more testing. A particularly revealing comment came from Mr Russo, Director of the PNT National Coordination Office (and therefore the point person on defining this testing), when he said that the additional testing couldn’t be defined without clarity from the FCC on what the “end state of operations” will be, in other words whether LightSquared’s proposed “standstill” on upper band operation will be made into a permanent ban by the FCC or will be left open.

LightSquared highlighted that it had made a new proposal to the FCC yesterday, which (even though the main focus is on further limiting LightSquared’s power on the ground) seems to embody a number of subtle concessions, notably that it is basically accepting the GPS industry’s 1dB C/No criteria for assessing degradation rather than the relaxed 6dB degradation criteria it had proposed back in June, and that it is proposing the use of a filter to protect GPS devices which will eliminate any possibility of operating in the upper 10MHz L-band frequencies in the future. Thus it seems that the FCC might now end up ruling that the upper 10MHz block can’t be used for terrestrial operations (at least not without a future application showing what would be an impossible proof of non-interference). As I’ve noted before, that might conceivably put LightSquared into default on some of its debt agreements, though of course, if LightSquared is unable to raise further funding in the near future, it might very well be a moot point.

1 Comment »

  1. TMF Associates MSS blog » Testing, 1..2..3 testing… said,

    September 12, 2011 at 11:59 am

    [...] 2012 presidential election and beyond the end of Chairman Genachowski’s term at the FCC. As I pointed out last week, LightSquared’s proposed filter characteristics also represent a complete abandonment of any [...]

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