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Sprint has quietly put plans to deploy LightSquared’s terrestrial Long-Term Evolution (LTE) network on hold until the Reston, Va., company finds a way to work past a series of regulatory roadblocks. Originally, Sprint agreed to provide tower space or to build new infrastructure in support of LightSquared’s wholesale 4G mobile data delivery service, assuming that LightSquared was able to get regulatory approval by the end of January 2012.
Since that original deadline, Sprint has extended the date twice so that LightSquared now has until mid-March to get regulatory approval to build its network, or the deal is off. However, Sprint, is seeing the writing on the wall, and LightSquared, which was already running out of money, put the brakes on.
“Sprint and LightSquared jointly decided to pull back on expenses and stop new deployment design and implementation of LightSquared’s network,” Sprint spokesman Scott Sloat told eWEEK. Sloat said that all work on LightSquared’s network has been halted.
The current schedule leaves little time for LightSquared to obtain regulatory approval as required by the arrangement with Sprint. The Federal Communications Commission formally requested comments on the National Telecommunications and Information Administration’s (NTIA) findings that the LightSquared proposed solution produces unacceptable levels of interference to GPS that cannot be fixed. This vacates the conditional waiver that LightSquared had been granted and suspends its right to operate.
Those comments must be submitted by March 1, after which the FCC will reach a final decision. LightSquared has the right to protest the FCC decision, but in any case, the regulatory approval won’t be forthcoming by mid-March 2012.
Meanwhile, LightSquared’s troubles keep piling up. The company missed a Feb. 20 payment to Inmarsat, resulting in a notice of default. This default simply adds to LightSquared’s financial woes, essentially making the company’s end a matter of when, rather than if.
While Sprint hasn’t pulled the plug on LightSquared just yet, it’s not clear that it plans to continue to support the company in its efforts, especially after the last deadline passes. A Sprint spokesman declined to comment on any specifics.
Sprint has already stopped work on LightSquard’s network, LightSquared is running out of money, and a reversal of the FCC decision to terminate the company’s 4G LTE plan is unlikely because of the interference with GPS.
And regardless of LightSquared’s claims that it should have precedence over GPS, the FCC isn’t politically tone deaf, and it’s not going to enrage tens of millions of GPS users just to placate LightSquared.
However, LightSquared does have a chance to field its network if it plays its cards right.
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.
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.
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?