LightSquared Comes Back Swinging At FCC

The latest round in the saga of LightSquared opened on Friday when a public comment period closed on the FCC’s latest proposed action regarding the company’s plans to deploy a satellite-terrestrial mobile broadband communications system.  LightSquared needs FCC approval to add a terrestrial network of 40,000 cell towers to work in conjunction with its SkyTerra communications satellite.  Opponents insist the terrestrial component will wreak havoc with GPS receivers.

Despite a tumultuous year in which opponents of LightSquared’s “ancillary terrestrial component” (ATC) surfaced from many quarters, including the Department of Defense, the Federal Aviation Administration, and a host of congressional committees, LightSquared is not backing down. 

Last month, the FCC announced that it plans to reverse a decision it made a year earlier and not grant the ATC permit.    LightSquared already has permission to operate its satellite in a frequency band that is adjacent to one used for GPS receivers.   That is not in dispute, only the request to add a terrestrial network in the same band.   A January 2011 FCC decision said that LightSquared could operate the terrestrial network as long as it could prove that it would not interfere with GPS.   It required LightSquared to work with the GPS industry to set up tests, and several rounds of testing ensued.

LightSquared’s opponents, including GPS industry representatives and the government’s National Space-Based Positioning, Navigation and Timing Advisory Board, concluded that the tests clearly show that LightSquared’s ATC would have dire consequences for GPS.

Government use of the radio frequency spectrum is governed by the National Telecommunications and Information Administration (NTIA) in the Department of Commerce.   The FCC regulates use of spectrum by the private sector.   On February 14, 2012, NTIA wrote to the FCC saying that based on its analysis of the testing, LightSquared would “impact GPS” and “there is no practical way to mitigate the potential interference.”   Later that day, the FCC said it would “indefinitely suspend” its January 2011 decision.  As usual, it opened a public comment period.  Initially it gave only 15 days for comments, but in response to a complaint from LightSquared that 30 days are typically allowed, the FCC extended the deadline to March 16.

In its comments to the FCC (posted in two parts on the FCC website), LightSquared comes back swinging.   Saying that it has spent $4 billion already trying to meet the FCC’s mandate to increase the availability of mobile broadband services under a legal framework established years ago, LightSquared asserts:   “The unfairness and inequity embodied in [the FCC’s February decision] is beyond drastic.  The sudden and dramatic proposal to preclude LightSquared from operating its licensed facilities is legally impermissible, arbitrary, and capricious….”  It then goes on at length to make its case, including that the tests were rigged, a claim it has made previously.

Arguing that its system would make broadband services available to rural areas, drive competition, and create jobs, LightSquared says the FCC’s proposed action “would eviscerate these benefits and represent an astounding, unsupported, and unprecedented reversal of Commission policy.”

The FCC set March 30 as the deadline for replies to the comments that were due March 16.

Meanwhile, Bloomberg News reported on Friday that Sprint Nextel cancelled its agreement with LightSquared to help build the network. It also said that Harbinger Capital Partners, a hedge fund that is providing much of the financing for LightSquared, “wrote down its LightSquared position by 59 percent last year because of the uncertainty” over the fate of this business.