When the Federal Communications Commission proposed on Tuesday to prevent LightSquared from launching its planned nationwide wireless network, the agency conceded one of the company's main arguments: Receivers should be designed to coexist with new networks.
That finding likely comes too late for LightSquared, but just in time for some of its competitors.
One winner could be DISH TV, which is seeking to develop a similar wholesale wireless network, and not on spectrum near that used by GPS. LightSquared planned to operate on spectrum near GPS's. When tests showed that LightSquared's network would overpower GPS transmissions, a coalition of GPS manufacturers and users organized to block the plan.
"The outcome was anticlimactic and profoundly ironic on several levels, clearing the way FCC action on a Dish wireless proposal nearly identical to LightSquared's with the exception of the GPS-interference problem ... and likely giving rise to a commission reexamination of a receiver standard issue championed by LightSquared," wrote Jeffrey Silva, an analyst with Medley Global Advisers.
In announcing its plan to officially block LightSquared, the FCC called for Congress and other agencies to develop new policies on receiver performance "to help ensure the most efficient use of all spectrum."
LightSquared argued that it had a right to use its licensed spectrum, and that GPS manufacturers should be required to build devices that don't receive signals from neighboring bandwidth. GPS companies, meanwhile, said that their devices were built based on the understanding that the adjacent spectrum would never be used in the way LightSquared envisioned.
Some opponents in Congress said that the spectrum near GPS should be cordoned off permanently. "Congress will have to safeguard this spectrum, whether it is held by LightSquared or any successor," said Rep. Mike Turner, R-Ohio, chairman of the House Armed Services Subcommittee on Strategic Forces. The Defense Department was a significant opponent of LightSquared's plans.
Other top Republicans on the House Science, Space, and Technology Committee praised the FCC's decision but said that GPS will need to adjust to new uses of spectrum.
"Opening up more spectrum for broadband remains a national interest, but not at the expense of GPS," said committee Chairman Ralph Hall, R-Texas, and Investigations and Oversight Subcommittee Chairman Paul Broun, R-Ga. "This is, however, a two-way street. GPS receiver manufacturers, users, and agencies also have to be mindful that spectrum scarcity will continue to be a challenge and must work together to efficiently utilize spectrum."
At a news conference after the commission's monthly meeting on Wednesday, FCC Chairman Julius Genachowski defended his original support for LightSquared and said the process worked the way it was supposed to. He said there needs to be a "concerted" effort to look at receiver standards, an area where the FCC has traditionally has limited regulation.
The FCC will need to address the conflict between license holders and receiver manufacturers as it attempts to squeeze more and more users onto a finite amount of spectrum, but that process is not likely to conclude in time to help LightSquared.
That leaves LightSquared with few options, many analysts said.
"LightSquared can oppose the FCC moves and seek more time for commercial deployment, but we doubt it will succeed," wrote Stifel Nicolaus analyst Christopher King. "It could also pursue litigation, but we're skeptical the courts would reverse the FCC, backed by the administration and bolstered by recent congressional legislation, on a matter implicating national security and aviation safety, at least any time soon."