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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 Solandri on 10/1/2012 6:20:59 PM , Rating: 3
1) There's no such thing as a perfect filter. You can't just cut off reception of all signals beyond a certain frequency. There is always some leakage. Here are examples of the frequency response of real-life bandpass filters. They are not the perfect rectangles you're imagining.

2) (1) also works in reverse. It's not just a matter of GPS units filtering out LightSquared signals in an adjacent band. It's also LightSquared transmitters broadcasting spurious noise in the GPS band as a byproduct of broadcasting in LightSquared's band.

3) The sensitivity of a GPS receiver determines how much "louder" the GPS signal has to be compared to the background noise before it can detect the signal. If you increase the background noise, you increase the required signal strength before it can be detected. There is no way around this.

4) While higher noise isn't a problem for heavy-duty GPS units like the $500+ units found aboard planes and boats, it will spell doom for the $0.10 GPS units found aboard cell phones. They're starting to put these cheap GPS units board cameras now, so all your photos will be tagged with a location (so your pics of your trip to Yellowstone can automatically be tagged Yellowstone). There are probably dozens if not hundreds of other potential uses for these cheap GPS units. All of which you'll be writing off if you increase the noise floor. They are cheap because they don't need heavy filtering to work.

Moving LS' signal 10 MHz away from GPS may or may not work. Let the FCC test it and see. But keep in mind (4). For it to be acceptable, I'd think you'd need like 95% of the commercial GPS receivers (including phones) to pass without interference before green-lighting this.

By mcnabney on 10/1/2012 8:27:59 PM , Rating: 2
5mhz is hardly enough spectrum to build a network on. Might be able to support 120Mb. That will especially not be enough if they get involved with 'unlimited' plans like Sprint.

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