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February 15, 2012

LightSquared in the Cross Hairs - NTIA Piles On and FCC Pipes Up

By Peter Bernstein, Senior Editor


As consumers we all want more choice. This is because more choice gives us the hope of finding products and services that better fit our needs based on our personal zones of reasonableness on a host of variables including price, performance, customer support, etc.  Given the relative lack of options for 4G LTE (News - Alert) service in the U.S., particularly in sparsely populated areas, it has been difficult not to root for the combative start-up LightSquared in its battles with regulators. This despite all kinds of relevant technical issues, financial questions about investors, and concerns about the impartiality of various interests (including those inside the U.S. government) taking shots at the company.


However, there is rooting interests and reality, and to put it very bluntly in a popular phrase, “reality sucks!” In fact, the harsh reality of yesterday may make it difficult for LightSquared to move forward.

The FCC (News - Alert) and NTIA

Here is the link on the Federal Communications Commission (FCC) website, where the subject of LightSquared (News - Alert) and GPS interference as addressed in a letter the Commission received from the National Telecommunications and Information Administration (NTIA) was tackled by spokesperson Tammy Sun. I will save you a click because reading the entire letter is critical:

To drive economic growth, job creation, and to promote competition, the FCC has been focused on freeing up spectrum for mobile broadband. This includes our efforts to remove regulatory barriers that preclude the use of spectrum for mobile services. To advance these goals, the Commission runs open processes – the success of which relies on the active, timely, and full participation of all stakeholders. “LightSquared’s proposal to provide ground-based mobile service offered the potential to unleash new spectrum for mobile broadband and enhance competition. The Commission clearly stated from the outset that harmful interference to GPS would not be permitted. This is why the Conditional Waiver Order issued by the Commission’s International Bureau prohibited LightSquared from beginning commercial operations unless harmful interference issues were resolved.

“NTIA, the federal agency that coordinates spectrum uses for the military and other federal government entities, has now concluded that there is no practical way to mitigate potential interference at this time. Consequently, the Commission will not lift the prohibition on LightSquared. The International Bureau of the Commission is proposing to (1) vacate the Conditional Waiver Order, and (2) suspend indefinitely LightSquared’s Ancillary Terrestrial Component authority to an extent consistent with the NTIA letter. A Public Notice seeking comment on NTIA’s conclusions and on these proposals will be released tomorrow.

“This proceeding has revealed challenges to maximizing the opportunities of mobile broadband for our economy. In particular, it has revealed challenges to removing regulatory barriers on spectrum that restrict use of that spectrum for mobile broadband. This includes receivers that pick up signals from spectrum uses in neighboring bands. There are very substantial costs to our economy and to consumers of preventing the use of this and other spectrum for mobile broadband. Congress, the FCC, other federal agencies, and private sector stakeholders must work together in a concerted effort to reduce regulatory barriers and free up spectrum for mobile broadband. Part of this effort should address receiver performance to help ensure the most efficient use of all spectrum to drive our economy and best serve American consumers.”

The key phrase here is “offered the potential.” And, for those of you who are not familiar with all of the issues here, the big one has been that the terrestrial component of the LightSquared service to become operational needed to pass tests that showed it would not interfere with current GPS users and/or if it did, mitigation of interference problems were available and in the public interest. The NTIA letter concluded they were not and the FCC is deferring to NTIAs opinion.  

LightSquared responds, the other side of the story  

Not surprisingly there is another side to all of this which as always has the effect of making this not some much black and white, or good guys versus bad, but rather, “It’s complicated.   LightSquared issued a press release giving its view on the matter. Below are a few selected points of interest:

“The NTIA’s recommendation relied on the flawed conclusions of the PNT ExCOM about LightSquared’s potential impact on GPS…NTIA relies on interference standards that have never been used in this context, and were forced by the GPS community in order to reach the conclusions presented today. This, together with a severely flawed testing process that relied on obsolete and niche devices, shows that the FCC should take the NTIA's recommendation with a generous helping of salt…The company fully expects the agency to recognize LightSquared’s legal rights to build its $14 billion, privately financed network. There is no question that an America where both the GPS industry and LightSquared's network can co-exist is a stronger one for any administration that believes in competitive markets and job growth.”

As famous futurist baseball legend Yogi Berra said, “it ain't over till it's over.” I agree. However, making bets as to whether LightSquared can convince regulators it is safe for them to go into the airwaves and that they have a legal right to do so would be inadvisable. If you are a gambler, the sports books in Las Vegas may provide less risk than this since you can get points and other options. 

Whether LightSquared can become an alternative 4G network or not raises an interesting problem for the FCC. The original regime for encouraging competition in the cellular business started out with A, B, C and D blocks of spectrum with the existing wired carriers being allowed to have the divested AT&T (News - Alert) AMPs licenses in the B blocks and competitors were offered the chance to bid, own, develop and operated services in the other blocks. Fast forward a few decades and look where we are in the U.S., an oligopoly with limited price competition and the #3 and #4 providers struggling for various reasons. The FCC really needs to think long and hard about this.

I like Sun’s phrase, “to help ensure the most efficient use of all spectrum to drive our economy and best serve American consumers.” Yes, I did not include the context that she is referring to receiver performance, but it needs to be much more than that. LightSquared appears to have a good legal team and some powerful allies in Congress. We are about to be treated to some more dramatic theater as to just how good they are.



Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest and best known brands, and has served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.

Edited by Jennifer Russell








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