Print 8 comment(s) - last by ipay.. on Oct 5 at 4:50 PM

Embattled firms scores deal with debtors, even as it submits a painful, yet promising proposal to the FCC

Bankrupt, embroiled in controversy over special-interest handouts, and crippled by a scathing review that suggested its business model would effectively destroy GPS use in the U.S.; it certainly seemed like we'd seen the last of billionaire investor Phillip Falcone's satellite 4G LTE bid, LightSquared Inc.

But the company is back with a surprising plan that sacrifices much, but could offer a gasp of life to the seemingly doomed effort.

The company's filed request with the Federal Communications Commission asks permission to use the 5 MHz of its spectrum that's farthest from the block used by GPS signals.  LightSquared agrees, in exchange, to not use the "upper" 10 MHz of the spectrum, saving it as a buffer to prevent interference.

The scheme is similar to a proposal by AT&T, Inc. (T) that recently broke over a decade of deadlock, receiving senior FCC official's blessing.

The plan is a painful one for LightSquared -- it is essentially giving up two thirds of its spectrum.  But there is an old saying: "Something is better than nothing."

LightSquared is giving up a two-thirds of its spectrum to try to convince regulators to let it use the final third. [Image Source: LightSquared]

That certainly seems to ring true in this case.

The company is currently at a crucial stage in its Chapter 11 bankruptcy, which was filed in May.  Alongside the FCC request is a critical plea to the judge in charge of bankruptcy asking to extend to at least last summer the time needed to file an exclusive reorganization plan.  The extension would give LightSquared time to see if it can sell the FCC on the buffered spectrum plan and possibly start to monetize the plan, if approved.

There's much at stake for hedge fund manager and former semi-professional hockey player Phillip Falcone.  Currently facing fraud charges from U.S. federal securities regulators, Mr. Falcone has also been battling with a group of creditors, whom LightSquared owes $1B USD.

Philip Falcone
Philip Falcone, one a venture capital wizard, lost nearly half his fortune and is facing fraud charges over the LightSquared mess.
[Image Source: Jacob Kepler/Bloomberg/Getty Images]

According to The Wall Street Journal, which first broke news of the new FCC request, U.S. Bankruptcy Judge Shelley C. Chapman -- the judge presiding over LightSquared's Chapter 11 -- gave Mr. Falcone a gift when she told the lenders that she would like side with Mr. Falcone.  That prompted the lenders to back down from their demands of either selling the embattled firm's remains or for Mr. Falcone to personally repay them.  Likely it means that the lenders will now have their debt restructured to reflect on the new fiscal reality facing the telecom.

It's the fourth quarter for LightSquared and the company is down by a couple scores, but the last couple of weeks have suggest that maybe -- just maybe -- it has a comeback left in the tank.

Source: WSJ

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By Souka on 10/1/2012 3:15:15 PM , Rating: 2
By Samus on 10/1/2012 11:24:30 PM , Rating: 3
Simple history: GPS spectrum is low frequency/low bandwidth. Low bandwidth means little data. Think HAM radio. You can send an email via the internet with a HAM radio from your boat in the center of an Ocean, but it'll take 5 minutes to transmit a few kilobytes. The FCC originally granted Lightsquared a license to use the spectrum because Lightsquared didn't disclose their intent to use the spectrum for high-speed data at ultra-high broadcast energy (around 100kw to 2mW)

This wrecked havoc on GPS signals which were intentionally weaker in order NOT to interfere with eachother and to give sensitive accuracy.

The FCC pulled their license after LS used the spectrum incorrectly.

Lightsquared should have done what every legitimate player does and bought or licensed spectrum permitted to use the high energy/high bandwidth they need.

By ipay on 10/5/2012 4:49:18 PM , Rating: 2
That is actually completely incorrect.

The frequencies were licensed to LightSquared over 10 years ago. In 2002, LightSquared (then operating as Mobile Satellite Ventures), submitted a filing to the FCC that was jointly signed by the GPS Industry Council that confirmed that MSV and the GPS Industry Council had reached an agreement on power levels for the terrestrial towers to be used by MSV's network. The FCC subsequently granted the approval in 2003. I've included the URL for the filing at the bottom.

The *only* thing that changed in 2010 was that LightSquared applied for a waiver to their existing license to be able to develop handheld devices that only had terrestrial radios, and no satellite radios in them. They did not request any changes to the already-approved power levels from the terrestrial towers. Under the original approval, all of their devices had to be dual-mode satellite & terrestrial. Had they simply gone and built out the terrestrial network that had been previously approved by the FCC with the endorsement of the GPS Industry Council, nothing would have happened. LightSquared simply never expected that an application to allow additional handset device designs that had no impact on the already-approved terrestrial network would have any significant repercussions.

The GPS industry, by way of this letter, clearly show that they are being very flexible with the truth when they claim they were "surprised" in 2010. They had 7 years to design filters into their devices, but they did not do so. In that time, LightSquared, invested in a business that had been approved by the FCC and even endorsed by the GPS industry council.

If the GPS industry had any real technical issues with MSV/LightSquared's terrestrial network, they should have fully investigated them before signing that filing that fully backs MSV's plans to proceed.

Here's the FCC filing from 2002:


By ipay on 10/5/2012 4:50:52 PM , Rating: 2
That URL didn't work...

Try this one:

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