LightSquared on Friday urged the FCC to reconsider its decision to effectively block LightSquared from launching commercial service on its proposed wholesale LTE network. The company said that the decision was "legally impermissible, arbitrary, and capricious." LightSquared also proposed that one solution to the impasse may be for LightSquared to swap its spectrum with another licensed spectrum holder.
"We are not going away," Jeff Carlisle, LightSquared's executive vice president for regulatory affairs and public policy, said during a briefing with reporters Friday.
During the briefing, Carlisle said that to the best of his knowledge none of the more than 30 wholesale agreements LightSquared has signed with various companies have been terminated. Clearwire (NASDAQ:CLWR) signed Cricket provider Leap Wireless (NASDAQ:LEAP) to a five-year LTE wholesale agreement earlier this week; Leap had been one of LightSquared's premier wholesale partners.
"When we move forward with a network it will be available to those customers whenever we're able to do that," he said. "We hope they'll hang with us as we resolve this issue." Carlisle added that the LTE wholesale business is "not a zero-sum game" and that if companies sign deals with Clearwire that will increase competition and decrease prices.
Interestingly, on Friday Leap filed comments with the FCC urging the commission to FCC not to revoke LightSquared's conditional waiver to launch its terrestrial network. Leap wrote that "the proposed actions are unnecessary, because LightSquared cannot commence operations under its integrated service waiver until the FCC determines that the GPS issue is resolved. Leap urges the commission to work instead towards a compromise solution that will continue to promote investment in, and the expeditious deployment of, LightSquared's network."
Carlisle also said that LightSquared may revisit the idea of pursuing a network-sharing agreement with wireless carriers in the future. Sprint Nextel (NYSE:S) said it will cancel its network-hosting agreement with LightSquared and will refund LightSquared $65 million as part of the move. Carlisle said LightSquared has been reworking its business plan to give it greater financial flexibility. As for funding its operations, Carlisle said "we can continue going for several quarters and we're looking to go beyond that."
LightSquared was dealt a crippling blow last month when, based on testing evaluated by the National Telecommunications and Information Administration, the FCC said it would not allow LightSquared to build its planned wholesale LTE network due to GPS interference concerns. The FCC then issued a public notice about the decision, which today LightSquared is responding to--in its filing, LightSquared is making clear it intends to push back against the FCC's decision.
FCC representatives did not immediately respond to a request for comment.
In LightSquared's FCC filing, the company said that a small number of GPS devices would be affected under its network plans, and that under the FCC's rules and the law there is no legal protection for "GPS receivers that are incompatible with LightSquared's network because they 'listen' for GPS signals in the portion of radio spectrum that is licensed to LightSquared."
LightSquared has long contended that GPS devices were not designed to properly filter signals from the company's L-band 1.6 GHz spectrum. The GPS industry has said they never anticipated LightSquared would build a nationwide terrestrial network using L-band satellite spectrum.
Additionally, LightSquared said the testing the NTIA relied on from the National Space-Based Positioning, Navigation, and Timing Executive Committee was fatally flawed, did not take into account LightSquared's decision to use the lower portion of its spectrum and that the tests were rigged to ensure LightSquared's network failed. Further, LightSquared argues the FCC did not properly evaluate the NTIA's conclusions.
LightSquared argued that it has proposed numerous plans to mitigate interference, including developing and testing filters and altering its network plans. If the FCC were to "conclude (despite the overwhelming evidence to the contrary) that those solutions do not work," then the FCC and NTIA should work with LightSquared to "identify and engineer a partial or total exchange of alternative terrestrial spectrum rights."
LightSquared did not detail which specific spectrum bands it might swap or how much spectrum it may want to exchange. Carlisle said all of that will depend upon the appropriate agencies--presumably the FCC and NTIA--being willing to entertain such proposals.
LightSquared has hired prominent lawyers Theodore Olson, a former U.S. solicitor general, and Eugene Scalia, a son of Supreme Court Justice Antonin Scalia, in a signal that it may try and fight the FCC in court. Carlisle said that the company hopes to resolve the issues via the regulatory process, but said that if the FCC does not work with the company to respond to its concerns, "we will examine all of our options and see where we go from there."
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