LightSquared Poised for a Return

 - November 3, 2012, 12:35 AM

Just when it seemed that LightSquared and its threat to GPS had finally faded away, following the February withdrawal of its operating licenses by the U.S. Federal Communications Commission (FCC), the company is back again, with new plans and, more surprisingly, a modest degree of FCC support. In addition, LightSquared owner Philip Falcone appears to have mollified the concerns of his investors, who just a few weeks ago were attempting to legally break the remaining several months of reorganization protection the company was granted after declaring bankruptcy in May, to recover the roughly $1.4 billion they have invested in the company.

There are several issues here that have combined to create a propitious intersection of good fortune for Falcone, and one can’t dismiss them all as coincidental. First is the continuing activity within federal government circles to further the national broadband plan (proposed last year) that would re-arrange the current radio spectrum allocations to private and government users to release a quite large number of small blocks of frequencies that, because of their size, have lain unused for many years, but together could add 500 MhZ to the radio band.

Second, and shortly after the FCC’s February decision, there developed afterthoughts within the GPS manufacturer community, suggesting that all GPS receivers should be built to higher performance standards, incorporating advanced filtering techniques and other factors, to avoid potential for interference in the future. Many observers believe the GPS industry’s acknowledged lack of uniform manufacturing and performance standards cast a degree of suspicion in non-technical circles, including some influential politicians, that LightSquared was not entirely to blame for some of the interference problems that arose in the 2011 tests, on the basis of which the FCC license withdrawal notice was issued.

Third, in July the President’s Council of Advisers on Science and Technology (Pcast) produced a 147-page assessment of the government’s broadband proposal, with a strong recommendation that this be done under a public/private partnership. In particular, the Pcast study pointed out that much of this unused capability had been arbitrarily allocated to DOD, which shows little interest in using it. The study also used the LightSquared/FCC confrontation as an example of the problems that the current frequency assignments produce. Without mentioning LightSquared, the report essentially echoed an earlier proposal from the would-be broadband company that, following its FCC license cancellation, it should be offered some unused DOD frequencies in trade for those it had paid for–but was eventually not allowed to use–even though the FCC had earlier encouraged the company to attempt to use them. The Pcast study also implied that the interference found in 2011 tests could not be attributed entirely to LightSquared.

LightSquared lobbyists made hay with these facts and promoted the company as financed entirely by public investors, in the traditional style of true entrepreneurs, rather that being a company dependent on government stimulus “green” loans, many of which had failed.

Unexplored Issues

In early October, at a Congressional hearing before the House Committee on Energy and Commerce, FCC chief of engineering and technology Julius Knapp testified that LightSquared’s original application was the first of its type to be considered by the commission, and introduced many issues that had not previously been examined by commission staff, or by LightSquared or the GPS community. For example, when the GPS community was asked for its assessment of the LightSquared proposal, its response–made in good faith–underestimated the signal strength and threat posed by LightSquared. It did not address the threat until the tests were conducted. As a result, it was implied that the FCC could reopen the consultative process to re-assess the situation.

However, an experienced communications industry observer subsequently told AIN that this could mean that any final determination of the issues “could take years,” depending on the acceptance of the Pcast study, establishment of the public/private frequency allocation proposal and the establishment of GPS receiver criteria, along with the likelihood of GPS community objection to claims of their equipment’s contribution to the test findings, potentially leading to further tests. And then there’s the Presidential election: regardless of outcome, it inevitably creates a six months or longer bow wave of administration diversions until everything gets back down to the business of government.

For some, therefore, including LightSquared investors, the burning issue on November 7 may not be about who won the election, but what Philip Falcone plans to do.

Comments

cgritz's picture

Another attempt of the obama admin. to pay back campaign donors....end this deal now...Blaming GPS Manf for lack of filters is ludicrous...Lightsquared stay within your bounds...

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