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Wireless-by-satellite start-up hits FCC roadblock over GPS interference findings

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LightSquared, a wireless-by-satellite network start-up created by hedge fund billionaire Philip Falcone, hit its first roadblock with new findings that its service interferes with Global Positioning System receivers.

A report filed Thursday to the Federal Communications Commission found that LightSquared’s planned operations could knock out 500 million GPS receivers used by police and firefighters, airlines, construction workers and consumers.

“Such a network would cause unacceptable interference to GPS operations,” the United States Global Positioning System Industry Council said.

Reston-based LightSquared simultaneously filed a proposal to the FCC that would avert much of the interference, the company said. The use of filters on its devices and GPS receivers could allow both technologies to operate on the same band of satellite spectrum, the company said.

The GPS industry disagrees, saying there are no technology fixes. But the FCC will ultimately decide whether it will allow LightSquared to pursue its aspirations of being a new competitor for mobile Internet customers.

The FCC said it would not allow LightSquared to launch its business until the interference issues are resolved. Spokesman Neil Grace said the agency will review the report, adding that “the FCC has a long-standing record of resolving interference disputes based on engineering data. . . . Our nation cannot afford to let spectrum go underutilized. America’s economic growth and global competitiveness are on the line.”

There is much at stake. Falcone put $3 billion into the venture through his Harbinger Capital fund. The creation of a mobile broadband satellite network would turn the investor into a wireless industry competitor with a national footprint rivaled only by Verizon, AT&T, Sprint Nextel and T-Mobile.

That rivalry would be welcome news to the FCC, which has pushed for more competition in the wireless industry. It is reviewing AT&T’s proposed $39 billion bid to buy T-Mobile, a deal that consumer advocacy groups say would create a wireless industry duopoly dominated by Verizon and AT&T, with eight out of 10 accounts.

LightSquared wants to lease its network to other businesses. It has signed wholesale leasing agreements with Leap Wireless and Best Buy. And other investors have placed bets on the Falcone venture, including UBS and J.P. Morgan Chase, with $586 million this year.

The tests, required by the FCC, showed significant interference. Construction companies such as Caterpillar and John Deere said the interference could potentially lead a tractor to run into a gas line. The aviation industry warned that flight safety would be jeopardized.

LightSquared will seek a compromise with the GPS industry, company officials say, including an agreement to help find technological solutions to the interference problems.

“This issue will be resolved by good data, smart engineers and good-faith problem-solving dialogue,” said Sanjiv Ahuja, the chief executive of LightSquared.

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