GPS A Side Issue In High-Stakes Broadband Battle

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Although the FCC's rulemaking process is nowhere near finished on the LightSquared/GPS issue, LightSquared's multi-billion-dollar business plan appears to be unaffected by the nagging details of regulatory approval and the potential destruction of the GPS system. According to CNET, Sprint, Nextel and LightSquared are about to announce a blockbuster partnership that will allow Sprint to migrate its service to the Long Term Evolution (LTE) broadband service that LightSquared is offering and is apparently the next big thing in wireless. In exchange, LightSquared gets the use of the 40,000 cell towers (remember those 40,000 towers?) that Sprint already owns for a rental fee of about $2 billion a year. What's significant for those who care about GPS in all of this is that the interference that's been clearly demonstrated is a side issue in high-stakes intrigue that may alter the broadband services landscape considerably.

The broadband publications are abuzz with suggestions that hedge fund guru Philip Falcone's venture into the wireless business hasn't gone through normal channels and that the political impetus will make it hard to stop. According to Bloomberg Falcone was bragging about the deal to investors in his Harbinger Capital Partners fund that the deal was done on June 15. That was the date LightSquared was supposed to have submitted a report to the FCC regarding potential interference with GPS but instead asked for an extension. By early July, the report had been submitted and it was clear that interference was an issue but LightSquared answered in news releases that it would alter its plans to minimize GPS interference. Meanwhile, the FCC is taking comments on the LightSquared proposal.