Investment firm Gerst Capital wrote an open letter to Globalstar CEO James Monroe asking for evidence that terrestrial low power services (TLPS) will work for the iPhone 6 and other LTE-capable smartphones.
"It is my understanding you took issue with an article I published on February 12th which demonstrated, based on analysis from an FCC accredited test lab, that Globalstar's proposed TLPS will not work on Apple's iPhone 6/iPhone 6+ and is unlikely to work on many other popular smartphone models," wrote Greg Gerst of Gerst Capital LLC, in the letter posted on Seeking Alpha.
Gerst asked for "transparent answers" to a series of questions, including evidence that supports the claim that TLPS works for the iPhone 6 or other LTE-capable smartphones and whether Globalstar validated TLPS operation on the iPhone 6 through actual testing.
Apple (NASDAQ: AAPL) did not respond to FierceWirelessTech's request for comment.
This isn't the first time Globalstar has been challenged about its TLPS tests, most notably through activist hedge fund Kerrisdale Capital. Gerst told FierceWirelessTech that he has no formal relationship with Kerrisdale, although he has spoken with representatives there.
Gerst is a former DSP engineer at Clarity Wireless, which was acquired by Cisco Systems in 1998, and he worked as a manager at Cisco for two years after that. His father, Carl Gerst, was a co-founder of the microwave company Anaren, founded in 1967 and acquired by Veritas Capital in February 2014.
Like Kerrisdale's short sellers, Gerst questions the entire business case for Globalstar. "The engineer in me finds this technically offensive," he told FierceWirelessTech, adding that he is open to a debate and welcomes anyone to point out flaws in his assessment. Indeed, commenters on his Seeking Alpha post did just that, saying any article by a short-seller is immediately suspect.
Gerst said he could technically be called a short seller, but Globalstar is one of only two or three individual short positions he has taken in the past few years. He makes no bones about it--he's in it for the money, and if he's got negative information about a company he's shorting, he's going to put it out there.
Gerst closes the letter by asking for a sit-down with Globalstar's technical experts, preferably in a public setting. "You seem like a genuinely nice person, and I often wonder if your TLPS claims are simply due to poor technical guidance," he wrote to the CEO. "It is hard to imagine anyone making such claims if they really understood the shaky technical ground upon which they're based."
Globalstar provided the following statement to FierceWirelessTech's request for comment: "Terrestrial Low Power Service represents a premium, differentiated and immediate solution to ease global broadband and Wi-Fi congestion--and is the first new band of spectrum added to the nation's supply that comes with an existing ecosystem of devices. Therefore, unlike traditional new spectrum, TLPS does not require billions of dollars and years of ecosystem development to commercialize. These attributes of TPLS create significant opportunities for partner engagement. In fact, industry players like Ruckus, Dish, Oceus and Samsung have already voiced their support for our petition to the Federal Communications Commission as well as various device manufacturers supporting modifications to permit use of this service. We look forward to the FCC adopting its proposed rules in the near future."
Gerst suggests that the LTE/Wi-Fi co-existence filters that have been included in a number of devices, such as the iPhone 6, in order to support Sprint's Band 41 spectrum will impair part of the TLPS channel in the devices. However, Tim Farrar, president of TMF Associates, points out in a research note that it would be possible for Globalstar to use alternative handsets either with different filters, which instead cut off part of the Sprint band, or without any filters at all, as was the case before device manufacturers began to incorporate Band 41 support.
The challenge is to create an ecosystem in which such devices are prevalent, which supports TMF's conclusion in its Globalstar profile that a deal with AT&T or Verizon is by far the best partnership option for Globalstar, Farrar said in the research note.
Globalstar is expected to conduct a technology demonstration, possibly at the FCC, but the timing is not entirely clear as to when it will happen, Farrar told FierceWirelessTech.
Globalstar's situation shares some similarities with previous attempts by other entities to repurpose satellite spectrum for terrestrial purposes. There's a widely shared belief that Dish's spectrum is worth a lot, whereas LightSquared got mired in GSP interference concerns. "I think there's examples on both sides," Farrar said, where some attempts to repurpose satellite spectrum have worked out quite well, and others where it's not gone so well. "We just don't know with Globalstar" whether or how quickly it will get permission and whether it will find a partner to go to market.
Earlier this month, representatives of New America's Open Technology Institute (OTI) and Public Knowledge (PK) met with FCC staff, explaining their support for greater use of Channel 14 and their support of TLPS, but only if the commission can ensure it will create a net benefit for the public interest. "Without appropriate testing and conditions to ensure Globalstar does not receive a gratuitous windfall that forecloses existing and future public use of the unlicensed spectrum at 2473 to 2483.5 MHz, the commission will both endanger the established Wi-Fi ecosystem and forfeit the opportunity to enable more intensive unlicensed use and innovation on the 2.4 GHz band in the future," they wrote in an ex parte filing.
Globalstar has proposed deploying equipment in both the 2483.5-2495 MHz portion of the S band, in which its MSS system is licensed, and in the adjacent 2473-2483.5 MHz band, in which certain Part 15 unlicensed equipment operates.
For more:
- see this Seeking Alpha commentary
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