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The news has not been good for wireless start-up LightSquared as recent reports suggest it is running out of cash as key Federal agencies and departments maintain the company has not demonstrated that its proposed Wireless service will not interfere with critical GPS applications.

 Background

LightSquared started 2011 by celebrating the FCC’s decision to grant the company a waiver to use its L-Band Mobile Satellite Service spectrum for a next-generation terrestrial wireless broadband network.  Absent a waiver, LightSquared would only be permitted to use terrestrial base station transmitters to provide a service that was ancillary to a mobile satellite offering — for example, to fill in dead spots in satellite coverage caused by large buildings in urban areas.  The FCC’s strong interest in deploying Wireless broadband services drove the favorable FCC decision.

LightSquared seemed poised to become a major player in the Wireless broadband market after Sprint Nextel signed on as a partner and Airspan announced that it would use LightSquared’s spectrum for utility smart grid applications.

GPS Interference Concerns Persist

The celebration proved premature.  LightSquared’s L-Band spectrum is adjacent to the spectrum band relied on by millions of GPS devices, most of which have been engineered to be extremely sensitive in order to accurately receive and decode a geolocation signal sent from satellites circling thousands of miles above the Earth.  As a result, even though LightSquared does not actually transmit in the GPS spectrum band, its terrestrial network signal may appear millions of times stronger to a GPS device than an intended satellite transmission — potentially overwhelming GPS reception.

The FCC waiver was conditioned on LightSquared’s ability to show that its proposed network would not cause interference to GPS receivers.

Unfortunately, testing conducted over the summer of 2011 resulted in significant GPS interference prompting LightSquared to revise its deployment plans and causing the FCC to request additional testing and information about the system.

Boomberg is reporting that the leaked preliminary results of recent government testing show that LightSquared has not solved interference concerns and its proposed network could cause interference to “75%” of GPS devices.  In particular, the FAA found that LightSquared’s signals interfered with certain flight safety systems.  Potentially most damaging is the report’s conclusion that “No additional testing is required to confirm harmful interference exists,” indicating that LightSquared may be reaching the end of its rope.

For its part, LightSquared reacted strongly to the leaked results.  In a Press Statement from Martin Harriman, Executive Vice President of Ecosystem Development and Satellite Business, the company characterized the leaked government testing as “illegal”, called for “a full investigation” into the leak, and questioned the motives of those who discussed the information with the press.

LightSquared’s outrage over alleged leaks still pales when compared to the barrage of critical filings submitted to the FCC this year from diverse industries that rely heavily on GPS, such as electric utilities and agricultural equipment manufacturers.  Of course, the FCC will have the final say and indications are the Commission intends to act on the testing results sometime next year.

As reported recently in Business Insider, however, LightSquared is apparently staring at a looming cash flow problem, calling into question whether the company can survive long enough to see the FCC process through to a successful conclusion.

In response to the mounting opposition, LightSquared is adopting a more aggressive tactic against GPS interests.  On December 20, 2011, LightSquared filed a Petition with the FCC requesting a declaratory ruling that GPS users and manufacturers lack standing to complain about interference from LightSquared’s operations; GPS receivers have no right to adjacent band interference protection;  and GPS manufacturers should bear the costs of ensuring that adjacent band signals do not interfere with GPS devices.