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LightSquared scrabbles to save itself after FCC stops LTE plan

Freetards abandon ship amid military spectrum swap bid

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LightSquared is reportedly trying to swap radio spectrum with the US military in an attempt to salvage its business model after the FCC pulled the rug from under the mobile broadband biz - but its customers are already abandoning it.

First to go is FreedomPop, a free-broadband-for-all operation (whose business plan makes LightSquared look quite sensible) that has signed up with ClearWire, but LightSquared has 30 other customers to whom it had intended to provide services on the network the FCC says can't be built.

The FCC has decided (or been told to decide, depending on whom one believes) that LightSquared's network will never be able to coexist with GPS, and therefore can't be allowed to exist, which leaves LightSquared almost $4bn out of pocket with customers waiting and a collaborative-infrastructure deal with Sprint on the table, but no usable radio spectrum within which to deploy a network.

Bloomberg reckons that's pushing the company to try a spectrum swap with the Department of Defence, as there's no significant blocks of radio on the market right now and time is running out. The US Military has enormous amounts of radio spectrum allocated to it, defence forces around the world were early adopters of radio and had great swaths allocated to defence use, before anyone thought it would have commercial value.

In the UK we're making the MoD pay for its radio spectrum, to encourage more efficient use and get some of that allocation onto the open market. The FCC has commented several times how much it admires that approach, so the idea of a swap with LightSquared isn't quite as insane as it first appears.

The FCC is certainly in a slightly embarrassing position. Ground components are allowed as part of the satellite-use licence, and LightSquared intended to exploit that loophole back in 2005. In 2010 the FCC added a coverage requirement to the licence, and, when the GPS industry started kicking up a fuss, a clause that required LightSquared to prove that it wouldn't interfere with GPS signals.

How the plan fell apart

LightSquared owns two bands, one right beside the GPS band and one some way below it, and believes that it has demonstrated that the lower band won't interfere with the vast majority of GPS kit. The company also contends that it shouldn't be responsible for mitigating interference when the fault lies with the GPS manufacturers, who have been happily making making devices that pick up signals outside the GPS band for decades.

The FCC's decision has appeased the (expansive) lobbying groups representing the GPS manufacturers, but LightSquared isn't going to go quietly and if a swap can be engineered then it could make everyone happy.

Except the incumbent operators, of course. They paid billions for their spectrum, and have always looked upon LightSquared with the distain of locals seeing the pub on the corner gentrified. Before the GPS issue kicked off, the existing operators were already complaining vocally about how unfair it all was - now that the GPS people are gone they'll no doubt be back in full voice.

But that may not be necessary. Doing a deal with the US Military will take time, and LightSquared doesn't have much time. FreedomPop wasted no time signing up an alternative network (though ClearWire has problems of its own), and the rest of LightSquared's customers are unlikely to wait long. The infrastructure-sharing deal with Sprint was dependent on LightSquared getting FCC approval, and if that falls then the cost of building the network jumps.

Which would leave LightSquared at least $3bn out of pocket, with a satellite in orbit which no one wants to use and no frequencies in which to deploy the network it can't afford to build.

No wonder it's angry. ®

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