The FCC is likely to approve a waiver for LightSquared that will allow the company to offer service on a terrestrial-only basis, bypassing a requirement that devices on its network be able to communicate with satellites. The waiver, which has not yet been officially awarded, is seen as critical to LightSquared's ability to meet its buildout timetable.
If the waiver is granted, it will be a major win for LightSquared and Harbinger Capital Partners, the hedge fund backing the firm with at least $2.9 billion. The waiver will allow LightSquared to offer terrestrial-only cellular devices, which will be cheaper than devices that have both terrestrial and satellite functionality.
"This is a promising opportunity to promote mobile broadband," a senior FCC official told FierceWireless on the condition of anonymity because the waiver has not been officially granted. "LightSquared would be a new competitor and entrant into mobile broadband with new sources of capital and a new kind of business model that consumers may find appealing. Having an extra player in the mobile broadband field increases competition and provides consumers with more choices."
LightSquared spokesman Tom Surface declined to comment in advance of the waiver becoming official.
The CTIA in December said it supported the flexible use of satellite spectrum, but wanted the FCC to make those changes to benefit the wider industry and not just one company.
LightSquared and the government also have been wrangling over potential GPS interference concerns posed by the network, which will offer LTE service on a wholesale basis. LightSquared has pledged to work with the FCC to address any interference concerns. "What we are doing is setting up a process for LightSquared and the GPS community to work together to resolve the interference issue on an expedited basis," said the senior FCC official. "We are requiring that the process be completed to the FCC's satisfaction before LightSquared offers commercial service under the waiver."
LightSquared is conducting LTE trials in Baltimore, Denver, Las Vegas and Phoenix, with commercial launches planned by the third quarter of this year. LightSquared inked a $7 billion contract with Nokia Siemens Networks in July to design and build the network, and signed agreements in October with Nokia (NYSE:NOK), Qualcomm (NASDAQ:QCOM) and other companies for devices. LightSquared, which has access to 59 MHz of spectrum, has said its network will consist of around 40,000 cellular base stations covering 92 percent of the U.S. population by 2015. The company has yet to publicly name wholesale partners.
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