LightSquared: By Hook or Crook
01.06.2012 by Andrew M. Seybold
What this really says is: We don’t care if we interfere with GPS receivers; it is not our fault but the fault of the receivers, which should not be afforded any protection in any event; this is our spectrum and we want to use it for a purpose for which it was not intended regardless of the outcome.
Happy New Year!…2012 is already shaping up to be a very interesting year in wireless. AT&T called off its acquisition of T-Mobile, but did get the nod from the FCC to complete the purchase of the 700-MHz spectrum Qualcomm was using for its mobile TV network. This spectrum will be incorporated somehow into the existing AT&T 700-MHz spectrum holdings. Meanwhile, on December 20, 2011, LightSquared took off the gloves and basically demanded that the FCC “resolve the regulatory status of unlicensed commercial Global Positioning System (GPS) receivers vis-à-vis LightSquared’s licensed operations in the 1525–1559-MHz Mobile-Satellite Service (MSS) band.”
In its Petition for Declaratory Ruling, LightSquared is basically saying that it has the right to make use of this spectrum for a terrestrial LTE broadband system even if doing so might interfere with existing GPS receivers. The reason, LightSquared states, is not because its network might cause the interference but rather because the GPS industry receivers were not sufficiently protected as to reject interference from the LightSquared spectrum. One of the most interesting (to me) statements in this document is, “It does not matter whether the Commission characterizes commercial GPS receivers as unlicensed receive-only earth stations that operate under Part 25 of the Commission’s rules, or as unlicensed devices that operate under Part 15 of the Commission’s rules. The relevant precedent under either analysis reaches the same inescapable result: unlicensed commercial GPS receivers simply are not entitled to interference protection from LightSquared’s licensed operations in the MSS band.”
What this really says is: We don’t care if we interfere with GPS receivers; it is not our fault but the fault of the receivers, which should not be afforded any protection in any event; this is our spectrum and we want to use it for a purpose for which it was not intended regardless of the outcome. I cannot believe that this document was well received at the FCC, and to me it shows how desperate LightSquared is becoming as it digs a deeper hole for itself, or rather a number of holes.
The first problem is that it may, according to some sources, be running out of money. Next is the fact that its deal with Sprint was supposed to expire at the end of 2011 but Sprint gave LightSquared a thirty-day reprieve to obtain permission from the FCC to build its terrestrial network. The FCC has never acted on anything I can remember within thirty days—certainly the FCC does not care about these types of business deal deadlines. Congress is stirred up about the GPS interference as is the DOD, FAA, and other agencies, and now LightSquared is basically threatening the FCC by demanding to be permitted to use its spectrum for something other than what it was originally licensed for (satellite communications with SOME infill of terrestrial stations to cover dead spots). Not only is it threatening the FCC, LightSquared is also saying that it doesn’t have any obligation to fix any interference problems it creates to GPS systems including those that could result in deaths and severe accidents if GPS devices fail to work properly.
The only word I have for LightSquared at this point is “arrogant.” It followed a method of selling wholesale services prior to having a network in place to “prove” it is relevant. It is also promising lots of new jobs and an influx of revenue. LightSquared hit the scene when there were questions about the number of network operators, yet neither the FCC nor the Department of Justice took it seriously enough to help mitigate the ATT/T-Mobile merger. Instead, the ATT deal died because it would reduce competition and stifle competitiveness—which we all know is simply not true. I have to ask if LightSquared was a serious player, wouldn’t the FCC and DOJ have taken that into consideration before they opposed the merger?
Since they did not, do you suppose there is a reason? Perhaps both the DOJ and FCC saw the writing on the wall and decided that LightSquared was not a serious competitor to AT&T and Verizon since LightSquared doesn’t even have permission to build out its network. Or perhaps both the FCC and DOJ are aware of the true investment that must be made by LightSquared and decided that the company does not have the resources to make its network happen. In any event, it appears as though LightSquared may be taking its last breaths of air, and that means it is getting desperate, pulling out all of the stops for permission to build out its network. But what happens if it fails to gain the approval of the FCC, and Congress is in a position to stop the FCC from giving LightSquared the green light? While Congress doesn’t control the FCC, it does control the FCC’s funding, which is the same as controlling the FCC.
So if LightSquared tanks, and I think it will, what is next for it and the industry? The partial answer is that LightSquared spectrum value would drop dramatically, its investors would take a beating, and the wireless industry is back where it started except that the thirty or so companies that signed up to resell the LightSquared broadband service are now in the wind. However, the names of these companies are now known and it won’t take long for the nationwide network operators to propose agreements with them and see if they really have the stomach for the type of investment it takes to play in the wireless market space.
My best guess is that of the thirty companies that have signed on to the LightSquared network, only about ten have the desire to proceed to bring LTE into their markets. Perhaps the rest of them will go back to what they were doing prior to the LightSquared deal, or perhaps they will try to work with another operator and come face to face with the reality of the marketing dollars involved in entering the wireless marketplace. No matter what, not all thirty-plus of these companies will ever be in a position to offer wireless broadband services. Rather, I think that many of them have been sold on the wonderful opportunities as portrayed by LightSquared and that when reality hits them in the face, many will simply cut their losses and go home. Wireless broadband service is about size and scale, money, spectrum, and above all, marketing dollars. Regardless of what they have been told by the LightSquared folks, selling against the big guys won’t be an easy task.
LightSquared is a perfect example of companies bitten by the wireless bug. They never open a spreadsheet and go to DC with a story that those who make the rules want to believe: Affordable broadband for all, very quickly; an opportunity to provide broadband in competition with the big boys; and the ability to make money in markets where no money has ever been made before. This is merely a pipe dream but giving LightSquared credit, it has certainly stirred up a hornet’s nest and made promises it cannot possibly keep.
So I, for one, hope the FCC and Congress stick to their guns and don’t let the false promises of a zillion new jobs and two zillion in income sway them to even consider permitting LightSquared to build a terrestrial system in this spectrum. We cannot afford to have any network that could, potentially, disrupt our GPS system. It would be a disaster and all of the jobs promised and the infusion of dollars promised could never make up for the loss of a single life because of the malfunction of a GPS receiver due to interference.
Andrew M. Seybold