LightSquared is the upstart carrier building a “wholesale” LTE network in the U.S, which is to be sold to other carriers that want to offer “4G” mobile data services.  Their proposed broadband wireless network would be of great value to wireline only carriers like Century Link and XO Communications which currently have no offering for “the mobile workforce.”  MSOs like Cox are also interested in cutting a deal with Lightsquare to resell LTE.  Traditional carrier’s that aren’t building their own LTE network might be enticed to pursue a wholesale relationship with Lightsquare.  Last month, Sprint agreed to pursue a 15-year deal focusing on the sharing of network expansion and equipment costs. 

Sprint plans to use LightSquared to help bring its network to 4G LTE, an improvement from its current, and slower, mobile WiMax network (built by Clearwire). The company has promised to spend $5 billion to upgrade its network over the next three to five years after losing contract customers in 14 of the past 15 quarters. An upgraded network may give subscribers an incentive to stay with Sprint, rather than looking elsewhere for fast wireless speeds.

However, the LightSquared concept is feared to be a danger to the global positioning system (GPS). In June, according to NextGov, a Federal Aviation Administration advisory report said that the upper band allocated for use by LightSquared will result in “complete loss of GPS receiver functionality.” On June 30, LightSquared filed a new plan based on use of frequencies allocated to it that are not in question.  Many thought that plan would resolve the GPS interference complaint.

But LightSquared suffered a potential knock out blow this week when the Federal Aviation Ad,inistration (FAA) said that its proposal for a high-speed wireless network would “severely impact” the nation’s evolving aviation-navigation system, despite the company’s revised plan to quell concerns about interference.   The FAA estimated LightSquared’s interference would cost the aviation community an estimated $70 billion over the next 10 years, in part because of the loss of existing GPS safety and efficiency benefits, and the need to retrofit aircraft.

“Billions of dollars in existing FAA and GPS user investments would be lost,” the agency said in the report. The agency report was examining questions about the LightSquared proposal presented by the national coordination office director for the Space-Based Positioning, Navigation and Timing Executive Committee, which is part of the Executive Office of The President.

LightSquared’s Executive Vice President of Regulatory Affairs Jeff Carlisle disagrees with the FAA assessment, saying it doesn’t accurately reflect its proposed changes and seems to be evaluating a plan that is no longer on the table.

“Simply put, the vast majority of the interference issues raised by this report are no longer an issue. We look forward to discussing this with the FAA,” Mr. Carlisle said.

The seven-page FAA assessment said LightSquared’s plan could also hurt U.S. leadership in international aviation by eroding confidence in the U.S.-owned global positioning system. That would be despite “presidential commitments” to the International Civil Aviation Organization about the continued safety and availability of GPS technology, the FAA said.

On June 20, LightSquared offered a new plan that it said wouldn’t interfere with the vast majority of GPS systems. It would use just the portion of its frequencies that are farthest away from GPS signals and would transmit weaker signals. Even with those changes, LightSquared’s network could still affect some precision GPS systems, which are generally used by farmers, the aviation industry and others.

At a June 23 congressional hearing about LightSquared’s broadband-spectrum proposal, several lawmakers cited concern about the company’s plans. The company now says the hearing was addressing its original plan, not its proposed changes. One key House lawmaker said at the hearing that the Federal Communications Commission shouldn’t approve a service that disrupts or burdens GPS devices in the aviation industry.

In the FAA’s recent assessment, it said LightSquared’s most recent proposal would “severely impact” NextGen, an FAA initiative to build a new national air-traffic control system that calls for satellite technology to replace ground-based facilities. NextGen, officially called the Next Generation Air Transportation System, relies heavily on GPS-based technologies. LightSquared’s interference would not only erode existing GPS safety and efficiency benefits, but would also force the FAA to replan NextGen investments, the FAA said, resulting in additional development costs and delays.

The FAA would have to return to dependency on ground-based aviation aids and billions of dollars in existing agency and GPS-user investments would be lost, the agency said.

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