For anyone that doesn’t know, LightSquared is a company that aims to build a 4G LTE Wireless Broadband Communication Network across the United States. They plan to wholesale their network capacity to various service providers in different business sectors. However, resulting from various negotiations back and forth between them and the FCC, on February 14, 2012, the FCC unfavorably made the decision to bar LightSquared’s planned national broadband network. Is the FCC to blame here or is LightSquared actually at-fault?
A Bit of History
Since 2001, LightSquared has been going back and forth with the FCC in order to get this network built. The FCC, being who they are, has very strict requirements in terms of how the network should interact once it is built. Beginning in January 2011, the FCC granted LightSquared the opportunity to “offer terrestrial-only devices rather than having to incorporate both satellite and terrestrial services.”
While LightSquared was delighted at this opportunity, many other GPS companies as well as the U.S. Air Force were unhappy with the decision. Many were afraid that LightSquared’s technology would interfere with many of these companies’ own satellites, and claimed that LightSquared should actually take more time and run more tests. In response, LightSquared promised to run extensive tests and work exclusively with GPS providers as well as giving the FCC monthly updates on their progress. Throughout 2011, LightSquared seemed to comply with all of the FCC’s demands and by September 2011, they threatened to sue the FCC if the network was not approved.
Since then, LightSquared has encountered a multitude of problems which are leading to increasing signs that the network most likely will never be fully built and implemented. In February of 2012, co-founder and CEO Sanjiv Ahuja stepped down from his role as leader. On March 16, 2012, Sprint decided to terminate its $9 billion contract to help build LightSquared over GPS concerns. On that same day, LightSquared filed an opposition against the FCC’s proposal to completely strip LightSquared of its operating license.
Is all of this the fault of the FCC? Not entirely. While the FCC is the primary decision maker on what can occur with the building of these networks, they made their final decision because of intense pressure from both GPS device makers and the Department of Defense themselves. When organizations at this level of authority are stating that a new network could cause major communication issues between satellites, possibly jeopardizing airlines and national safety (not to mention dropping fertilizer on a neighborhood rather than a field), the FCC really didn’t have any ground on which to stand.
Because of such intense opposition against their network as a whole, LightSquared doesn’t have much of a fighting chance in surviving this ordeal. With companies like Sprint pulling out their contracts, LightSquared has to come up with fixes to their infrastructure extremely quickly and with much less money to do so.
Don’t Jump the Gun
The problem wasn’t with the FCC’s final decision, but rather how they went about approving and then denying LightSquared’s use of public airwaves. They started with a preliminary approval before they had done complete due diligence on the feasibility of the use of those airwaves. The FCC should have performed some initial investigation of the viability of a terrestrial network using airwaves adjacent to those used by the GPS satellites. The GPS concerns should have been ferreted out before LightSquared invested billions in launching a network.
While LightSquared isn’t completely dead, they are considering a voluntary bankruptcy. One can only image the possible lawsuit that will arise as investors in the venture seek damages for what appears to be “wishy-washy” policy on the part of the Federal Government. One unfortunate lesson though that all entrepreneurs should walk away with is that nothing is certain, even decision made by the federal government.
About the Author: Jonathan Martin is a Seattle website developer who has followed the LightSquared saga with great interest. As mobile becomes a major player in the connected world, a new major mobile operator in the United States would have moved the nation that much closer to total connectivity.