LightSquared is jilting taxpayers out of billions, GPS industry claims

The Coalition to Save our GPS has opened up a new front of its war of words with LightSquared. It’s now claiming that if LightSquared really had permission to build a terrestrial mobile broadband network than it should have paid billions of dollars for that right at auction, just like any other U.S. wireless operator.

The Coalition is claiming that LightSquared is trying to pull a regulatory slight-of-hand to gain a windfall in mobile broadband frequencies outside of the normal auction channels. By turning L-band spectrum formerly designated only for satellite transmission into terrestrial mobile spectrum, LightSquared is effectively increasing the value of its licenses by $10 billion, the Coalition said in a statement.

Normally any designation of spectrum for mobile broadband would require a competitive auction among operators, raising billions of dollars for the U.S. Treasury. If LightSquared receives permission to build its terrestrial network, the Coalition said, it would circumvent that process, jilting taxpayers out of gobs of revenue during in financial troubled times and giving it an unfair advantage against traditional wireless operators.

LightSquared claims it’s had permission to build terrestrial networks in the L-band since 2003, when the FCC granted it an ancillary terrestrial component (ATC) waiver. That right was further reinforced in January when the FCC granted it an additional to waiver to separate out satellite service from terrestrial service, allowing it to offer a mobile broadband service only from its ground-based networks. In that sense the Coalition is correct: with the stroke of a pen the FCC essentially turned satellite spectrum of limited value into mobile broadband spectrum of enormous value.

The second waiver, however, was conditional. In order to build that terrestrial network, LightSquared had to prove it could run a ground-based LTE network without interfering with GPS receivers that depend on nearby Global Position System and GPS augmentation bands (CP: LightSquared gets its waiver—with a caveat). The extent of that interference, whether it can mitigated and ultimately who’s responsible for it, have been at the crux of the very public argument LightSquared and the GPS industry have fought for the last year (CP: Sorting out the LightSquared GPS interference mess).

At issue is how LightSquared is interpreting the ATC rules. Originally a network built under the ancillary terrestrial component was intended to be what its name implies, “ancillary”. The FCC adopted the provision to allow satellite broadband providers and broadcasters to supplement their networks in areas where there was no clear line of site to the heavens, such as in the urban canyons of metropolitan downtowns and indoors. The Coalition claims that LightSquared has been stretching the definition of ATC ever since it hatched its LTE plans to the detriment of multiple industries and multiple constituencies.

LightSquared isn’t just bilking taxpayers out of licensing revenues, the Coalition claims; it’s foisting a big bill on taxpayers in the form of government receiver retrofits and upgrades. The Coalition claims that the cost of replacing— not retrofitting—GPS devices could cost as much as $245 billion, while LightSquared has only offered up to $50 million for refitting government gear.

“All in all, LightSquared’s proposal represents a new low in financial engineering at the expense of the U.S. taxpayer,” the Coalition’s statement said. “Never before has a single company tried to gain so much from our national spectrum resources and pay so little for the collateral damage caused by its plans.”

By pointing toward the public impact of LightSquared’s network, the Coalition is seeking to shift its argument away from one driven primarily by self-interest. If the LightSquared network is approved, GPS device makers may be on the hook for hundreds of millions of dollars of commercial high-precision device upgrades spanning multiple industries. So far LightSquared isn’t offering to the foot the bill for those antenna and filter components, or compensate GPS users for any downtime caused by factory retrofits.

LightSquared itself has used similar tactics to reframe the argument before the public. Over the summer, LightSquared began accusing the GPS industry of willfully ignoring potential interference issues and using sloppy receiver designs that are ultimately responsible for any problems they experience (CP: LightSquared lashes back at GPS industry). Basically LightSquared has started claiming GPS device makers are squatting in its spectrum. In August, LightSquared brought Uncle Sam to the debate, accusing GPS makers of ignoring Department of Defense guidelines on GPS receiver designs that would have mitigated interference problems (CP: LightSquared plays the Patriot card).

Recently both sides showed signs of scaling back the rhetoric and even a willingness to come to a compromise as LightSquared unveiled antenna and filter technologies that could solve the interference problems (CP: A compromise between LightSquared and the GPS industry could be possible). But the accusations erupted once again as the two sides argued over who would pay for the upgrades of existing receivers (CP: LightSquared, GPS industry spar over proposed interference fix).

Today LightSquared and PCTEL announced they had developed an antenna that can be retrofitted to existing high-precision GPS receivers, making them compatible with the LightSquared network. Alcatel-Lucent’s Bell Labs is performing independent tests of the design. With Javad GNSS’s new receiver filter design and other technologies from PCTEL and Partron, LightSquared said GPS device makers now have several options for upgrading their receiver designs.