Satellite firm LightSquared may be looking to the Department of Defense to save its LTE network after the FCC denied its proposal to build the high-speed network. VentureBeat.com reports:
In a last-ditch attempt to keep its wholesale LTE 4G network alive, Lightsquared may be considering swapping its wireless airwaves with the Department of Defense, sources tell the Wall Street Journal.
The FCC yesterday rejected Lightsquared’s application to build a wholesale LTE network in the U.S. because it had irrevocable issues with GPS equipment. The DOD’s airwaves, on the other hand, are farther away from GPS signals and shouldn’t cause any interference, the sources say.
But of course, for such a deal to be made the DOD would have to be willing to swap with Lightsquared. Something tells me that the DOD wouldn’t have much use for wireless frequencies that don’t play nicely with GPS, especially since its current airwaves are mainly used for aircraft testing.
Lightsquared is said to be looking at other potential options for turning around its network, but at this point it’s unclear what those would be. The DOD swap would also require Lightsquared to raise additional funds, which would be difficult now since the company will soon have to cough up interest payments on $1.6 billion in secured loans and hundreds of millions in debt.
Even if LightSquared fails to save its network, at least not all is lost. The Verge reports:
Lightsquared's plans to build out an LTE network appear to be in danger, but the company stands to regain some cash if the plans fall through. If the FCC doesn't approve the deal by mid-March, Sprint will have to return $65 million that Lightsquared paid to the carrier last year as part of the proposed 15-year agreement to share buildout expenses and wireless spectrum. And with yesterday's news that the FCC will reject the proposal due to longstanding concerns that the network would interfere with GPS, it's looking very likely that Sprint will have to cut Lightsquared a check soon. Lightsquared claims that testing by the National Telecommunications and Information Administration is flawed, but it's hard to say what the company will be able to do in the next month to change the FCC's mind.
Meanwhile, the FCC is treading lightly after the whole LightSquared controversy. The Post’s Cecilia Kang reports:
The Federal Communications Commission’s decision to yank its support for satellite firm LightSquared all but ends that company’s effort to launch mobile services, analysts say.
Now comes the hangover.
FCC officials say they still have faith that satellite technology can be used to create wireless networks rivaling those of AT&T and Verizon Wireless. But analysts say the agency will step more carefully this time, after being burned by congressional investigations, feuds with other federal agencies and two years of work wasted on LightSquared.