The FCC Puts the Kibosh on LightSquared

According to the New York Times and others this morning, LightSquared (news) has finally run out of runway.  In response to the NTIA’s conclusion that there is no practical way to resolve the GPS interference issue, the FCC has decided to revoke the conditional approval they had handed out to Philip Falcone’s company last year.

Just yesterday the wholesale wireless hopeful reiterated its commitment to resolving the GPS dispute, but it appears that the game is up. LightSquared has hotly disputed the recent round of testing, saying it was rigged from the start and calling for a new round of independent tests that would do a better job of it. But as I said a few weeks ago, this report is of the sort that bureaucrats have created to justify something they’ve already decided on. And so here is that decision today.

While having a wholesale wireless alternative would have been a good thing for competition, it has been clear for a couple of quarters now that there were just too many hurdles in the way for this to happen. The GPS industry may have been sloppy in its own implementation, but they are strong and already in the field while LightSquared is not. Meanwhile, in an election year the whole thing has become a political football, and one that the Obama administration would rather punt than continue to defend against Republican attacks once the general election campaign gets underway.

What this means now is that there are a whole lot of wholesale partners of LightSquared that are going to be in the market for a new buddy, just as clwr and Sprint Nextel (NYSE:S, news, filings) start making their own LTE headway. Still out there in the wings is DISH, which wants to do the same thing as LightSquared but with spectrum further from the GPS guys. But their plans are not quite ready to roll, which means that we may now see a migration to Clearwire’s wholesale LTE efforts.

But what happens now to all that LightSquared spectrum? Is it cordoned off forever, unable to be used for wireless broadband due to sloppy GPS receiver design? I’ll bet that behind the scenes the FCC is also talking to the GPS industry. They’ll be suggesting that now that this particular battle has been won, the GPS guys had better solve the problem their way and free up the spectrum or they get to face a real opponent who needs the spectrum and won’t be nearly so easy to push around (e.g. AT&T).

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Categories: Wireless