LightSquared Threatens Legal Action

Jeff Carlisle, VP of regulatory affairs and public policy at LightSquared, told FCC Chairman Julius Genachowski that the company's next step will be legal action if the Commission rejects their planned nationwide broadband network. 

In a briefing on Monday, Carlisle also told reporters that any interference caused by the LightSquared network is due to the GPS devices picking up frequencies outside of their designated band.  Even when operating on the lower 10 MHz of spectrum furthest away from GPS frequencies, the 40,000 sites that would make up their nationwide network would render most high-precision devices useless without some type of filter. 

Last month, LightSquared announced that it will market Javad GNSS filters for positioning applications by November 2011, followed by filters for precision timing devices by March 2012.  There's no doubt that the company will profit considerably from this new technology, and many are asking whether or not this profit will come from taxpayers' pockets or if LightSquared will be footing most the bill to prevent interference from their network, similar to Sprint Nextel's rebanding debacle. 

Economics of the Wholesale Network
According to Total Tele, LightSquared needs $3.5 billion to remain cash positive over the next two years, an amouint which CEO is confident they will be able to raise.  LightSquared claims to have $150 million earmarked for fixing the interference issue, but some wonder if that will be sufficient.   The company's network will allow wireless carriers to purchase signal wholesale for $6/G (giving them at least a 50% revenue margin on their charges to customers).  The company's recently signed deal with Sprint Nextel saves them $13 billion on buildout from the ground up.


With LightSquared's filter solution Public Safety and Homeland Security communications departments would be compromised in the name of private interest, either just logistically or as some fear, logistically and financially. 

The question FCC officials must ask themselves is simple:  will the benefit of a nationwide broadband network (allowing companies like AT&T, Sprint, and Verizon to increase their profit margin) outweigh the cost of retrofitting each high-precision Public Safety GPS receiver? And once they have the answer, will they stand up for what they determine to be in the public's best interest?