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Move will likely force Sprint to sever ties with firm, losing valuable source of income

The National Telecommunications and Information Administration (NTIA) warned the White House and Congress that the LightSquared's proposed satellite 4G service could cause serious degradation of GPS signals, including those vital to U.S. defense.  Independent contractors hired by the U.S. Air Force Space Command determined that the service could interfere with a whopping 75 percent of consumer and government GPS devices.  A second round of tests from another independent contractor validated these findings.

And yet, somehow, the service was almost approved.

I. The Service, the Damage That Almost Was

Why that was case depends on who you ask.  Republicans have accused President Obama of financial tampering -- in essence taking bribes.  On the eve of the Federal Communications Commission's decision to grant the service tentative approval, emails indicate that the LightSquared's executives and legal counsel had reached out to numerous members of the Obama administration reminding them of a series of fund-raisers they were holding to raise money for the President's reelection war chest [source].

The FCC granted the go ahead.

If you asked members of the Obama administration or the FCC -- a pseudo-autonomous agency in which the majority of commissioners are appointed by the sitting President of the United States -- they would surely say it was an innocent mistake.  In retrospect, they would likely say, a deal that seems too good to be true, likely is.

Neither side may ever have the proof they need to show their accounting is the true tale.  But, ultimately, the NTIA and Air Force stepped in before LightSquared could do much of anything with its provisional authorization.  And after those agencies raised a commotion about the dire interference possibilities, in the end, the outcome ultimately became what most had expected it to be in the first place -- a rejection of the LightSquared service plan.

II. FCC Forced to Strike Perhaps the Final Blow Against LightSquared

The FCC today issued a statement, revealing that it has squashed LightSquared's plans -- likely for good.  The agency tries to keep a chipper tone, despite the swirling allegations of impropriety, writing:
 
To drive economic growth, job creation, and to promote competition, the FCC has been focused on freeing up spectrum for mobile broadband. This includes our efforts to remove regulatory barriers that preclude the use of spectrum for mobile services. To advance these goals, the Commission runs open processes – the success of which relies on the active, timely, and full participation of all stakeholders.  

LightSquared’s proposal to provide ground-based mobile service offered the potential to unleash new spectrum for mobile broadband and enhance competition. The Commission clearly stated from the outset that harmful interference to GPS would not be permitted. This is why the Conditional Waiver Order issued by the Commission’s International Bureau prohibited LightSquared from beginning commercial operations unless harmful interference issues were resolved.  

NTIA, the federal agency that coordinates spectrum uses for the military and other federal government entities, has now concluded that there is no practical way to mitigate potential interference at this time.  Consequently, the Commission will not lift the prohibition on LightSquared.

And just like that LightSquared is left with a 5.4 ton hanging space decoration -- one of the most expensive satellites in history.  

SkyTerra 1
LightSquared's giant SkyTerra 1 now won't be seeing much use. [Image Source: Boeing Comp.]

And just like that Sprint Nextel Corp. (S) is left scrambling to find a new 4G ally.  Sprint had a hefty $15B USD contract to deploy LightSquared's terrestrial LTE.  But Sprint made it clear that if the satellite service was rejected, the 4G service as a whole could not survive, and the deal is over.

III. Game Over

LightSquared appears dumbfounded at these developments.  In a letter responds, it defiantly writes:

In response to the NTIA's recommendation to the FCC today regarding LightSquared's network, the company said it remains committed to finding a resolution with the federal government and the GPS industry to resolve all remaining concerns. LightSquared is confident that the parties will continue the on-going efforts to explore all engineering options and alternatives to find a solution to this difficult issue.

The NTIA's recommendation relied on the flawed conclusions of the PNT ExCOM about LightSquared's potential impact on GPS. 

The telecommunications company has claimed that the government funded independent studies -- all of them -- have been badly flawed.  It has even claimed that the GPS companies had created the problem in question and that it was their responsibility to solve it.

The firm will likely continue to voice these complaints while there are ears left to listen.  But in the end, it looks like it's game over for LightSquared and its massive, yet poorly designed, orbiter.

(LightSquared is a privately held telecommunications company.)

Sources: FCC [rejection statement], LightSquared [PR Wire response], iWatchNews [Obama fundraising emails]



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RE: is there any truth to this?
By foolsgambit11 on 2/15/2012 8:16:08 PM , Rating: 2
Okay, but where does LS' huge satellite come into play?


RE: is there any truth to this?
By Accord99 on 2/15/2012 9:03:29 PM , Rating: 2
Think of it as a loophole, allowing them to claim that they are setting up an integrated satellite-ground network even though the network will be overwhelmingly ground based and the vast majority of handsets won't even have satellite access.

One or two satellites are a lot cheaper than the $10 billion Verizon paid for its spectrum.


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