LightSquared May Be Able to Recover Some of the Work It Has Already Done
The FCC has announced a plan to auction off new spectrum that won't interfere with GPS as a way to provide mobile broadband service. If LightSquared can either manage to trade the section of the radio spectrum it currently has for some of the new spectrum that's opening up, or sell its existing spectrum and join the auction for the new spectrum, then the company will be able to recover at least some of the engineering and planning that it's already done. This could reduce the time required to deliver its service.LightSquared, unfortunately, has chosen to follow AT&T's lead in dealing with the FCC, and to adopt a strategy of arrogance in dealing with Congress. It's becoming increasingly obvious that neither of these strategies will work. The FCC obviously isn't moved by LightSquared's complaints that it's spent billions on the current plan. Congress isn't about to anger the voters. Worse, nobody is buying LightSquared's argument that its broadband product will lead to significant job creation. Right now, LightSquared is at a juncture. The company can choose to continue its fruitless quest to get what it wants in its current plan, which will ultimately lead to failure. Or the company can choose a different plan that has a chance of success, and stop spending time and money on a lost cause. Right now, LightSquared appears to be trying to win the unwinnable. Sprint, meanwhile, also needs to make a choice. It's hard to believe that Sprint wants to be known as the wireless carrier that killed GPS, but if it continues to embrace LightSquared's current technology and approach, that's what will happen. All of those positive feelings that Sprint's CEO built during the fight against the AT&T merger could vanish in a second as soon as the GPS outages start, and you can be certain that Sprint would be the company held to account. After all, it's their towers, so it must be their fault. Is that really the outcome Sprint wants?
In order to accomplish such a move to a new part of the radio spectrum, LightSquared needs to avoid wasting both its financial resources and whatever resources it may still have with its corporate partners. Sprint may, for example, be willing to keep the deal alive if it looks like LightSquared can avoid its regulatory problems by shifting to a new frequency band.