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LightSquared hits FCC right where it hurts

Offers let-out clause, but it won't be easy

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LightSquared has issued a formal response to the threatened suspension of its licence, accusing the FCC of political bias and riding roughshod over precedent and Constitutional rights.

The damning response runs to more than 400 pages (PDF, comprehensible but very long), but mostly reiterates the arguments that LightSquared won't knock out GPS systems, and that even if it did it wouldn't be LightSquared's problem. The filing also lays out the legal case, should the FCC fail to change its mind, and offers one way for the regulator to avoid litigation entirely, from LightSquared at least...

LightSquared's filing also addresses what it sees as common misconceptions about its business: that the interference issues are a recent development, that it needs the licence waiver to operate, and that there is no precedent for the FCC agreeing to swap the unusable spectrum for a chunk of the good stuff.

LightSquared points out that more than a decade ago, in 2001, satellite operator Inmarsat filed an objection to the planned ground network for fear of interfering with GPS systems. Since then LightSquared paid $100,000 for a Department of Defense study which positioned 520 base stations around Baltimore and Washington to see if GPS systems would be affected.

That study, LightSquared claims, satisfied both the DoD and the NTIA (National Telecommunications and Information Administration) that its network would not leak signals into the neighbouring GPS bands. At the time, the NTIA was only worried about that kind of out-of-band emission so LightSquared went ahead and spent $1.1bn launching a couple of satellites, and almost half a billion licensing additional spectrum from Inmarsat.

But the NTIA's letter prompting the FCC's threat, embodied in its Public Notice, is concerned with GPS receivers which are tuned to receive signals outside their normal band. This is done either to improve the sensitivity or to avoid having to use two separate radios to pick up additional GPS data, but it has the effect of picking up LightSquared's signal too.

The filing makes numerous references to the insanity of protecting an unlicensed device (such as a GPS receiver) from interference outside its operating band. LightSquared imagines the manufacturer of a badly tuned satellite receiver demanding that US Army turn off its radar, which occupies a neighbouring band, and asking:

Would 'hostile' nations be able to effectively hijack US spectrum policy by flooding the market with cheap, unregulated devices that are not compatible with neighboring spectrum uses in the US and then demand interference protection?

Plank two of LightSquared's defence questions whether its network would generate significant interference anyway. The NTIA's letter quotes test results which LightSquared has disputed before – on the grounds that they used a power level which LightSquared has already agreed to ratchet down – and it considered a GPS receiver to be knocked out based on a 1dB drop in signal strength. Mobile phones incorporating GPS, which were tested on their ability to accurately work out where they were, passed the tests despite being beside a LightSquared transmitter, and LightSquared contends that the Ultra Wideband regulations dismiss much higher levels of interference as comparable to background noise.

LightSquared also has issues with the GPS manufacturers being able to select which kit was tested, and reckons it's suspicious that the FCC managed to evaluate the evidence presented in the letter within a single day (the NTIA is an advisory body). But it seems likely the FCC was fully aware of the contents of that letter well before it was posted, and so had the Public Notice ready.

The FCC's Public Notice suggests that LightSquared will lose the right to deploy any ground component at all, which breaks precedent in quite a fundamental way. The Public Notice also threatens to suspend LightSquared's waiver, which allows the network to deploy devices lacking satellite capability.

Ancillary Terrestrial Component (ATCs) are used by satellite-phone operators to push their signal into buildings or shadows (often created by buildings) and the right to build AGC comes with the satellite frequencies (that's in the USA; in Europe things are different). LightSquared's plan was to build a lot of ATC sites, so many that some (the majority of) devices wouldn't need to connect to the satellite at all. To do that LightSquared needed two things from the FCC: permission to build so many ATCs (which came with a change to the rules in 2005), and the right to deploy devices without any satellite capability (essential to complete with the existing network operators). This is the much-discussed waiver which was in turn dependent on LightSquared demonstrating that it wouldn't interfere with GPS systems.

LightSquared reckons it has done that, though mitigation strategies including dialling down the power and temporarily shifting bands, but if the FCC decides that isn't enough then LightSquared is willing to consider moving to a different band entirely.

There is precedent here, which LightSquared is keen to emphasise despite the disparity in scale. Nextel's 800MHz service was bumped up to 1.9GHz when the FCC wanted to create contiguous blocks in 2004, and the Digital Electronic Messaging Service was shifted out of its home at 18MHz (way up the dial to 24GHz) back in 1998, with the FCC supplying the new spectrum in both cases.

The FCC hasn't any spectrum to give LightSquared, but the military has plenty and the FCC might be able to broker a deal. Which sounds fine until one considers how the incumbent network operators would react. When LightSquared first launched its plan those operators were up in arms, but since the GPS issue kicked off they've been notable by their silence – in public at least. Those network operators paid top dollar for their spectrum and don't want LightSquared mopping up their customers with its cheapo (satellite) spectrum, and they'll fight every step of the way to stop that happening. While the GPS crowd were throwing themselves into the fray there was little point in exposing themselves, but if the FCC looks likely to offer a spectrum swap they'll be on the warpath before you can say "protectionist cartel".

LightSquared's point is that for years the FCC has been demanding it spend money build a network (which the FCC required to reach "at least 100 million people by December 2012"), but the regulator has now changed the rules to forbid the network and has thus made its assets worthless, in breach of its Constitutional rights. The FCC's right to block LightSquared is dependent on those disputed test results, and it will be interesting to see how they stand up in court.

This is still a response to a public consultation, but LightSquared has recruited the team and now lays out the evidence for a legal challenge. That challenge can only be avoided by a spectrum swap, which would just leave the company, and regulator, fighting the not-inconsiderable weight of the existing network operators. ®

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