LightSquared, FCC, Trimble, the U.S. Military and MSS Band Usage - It is Complicated

In case you have not been following it, or you have and don’t understand why a few days ago ambitious wireless broadband provider LightSquared CEO Sanjiv Ahuja was placing open letters in newspapers around the U.S. in selected states, there is a not inconsequential battle being waged in Washington, D.C. that speaks directly to the future of rural broadband.  Given that October 4 was “Broadband Works for Rural America” advocacy day, and October 6 is the day the FCC will announce its plans for overhauling the Universal Service Fund that helps enable rural broadband, this one is worth noting. It is also worth studying up on for those following the AT&T/T-Mobile deal since LigihtSquared has drawn attention in various filings because of its potential as a possible major 4G nationwide competitor to current national cellular players.

The dispute

In lay terms, the dispute centers around the use/misuse and value of the MSS band of radio spectrum used by satellite communications companies.  Here are the details:

• To achieve a truly national wireless broadband footprint, Light Squared proposed and got licenses from the FCC for a network that combined the use of satellites and the MSS band frequencies on terrestrial portions of its network.
• The problem is that use of MSS terrestrially can interfere with GPS services. These include not just various commercial GPS services but also those used by the military.
• LightSquared contends that existing GPS users can retrofit their transceivers a minimal cost and has even offered to pay $50 million to retrofit existing users.
• Trimble and the U.S. Air Force, amongst others, have weighed in saying the cost is not millions but billions and the potential harm is significant.

But wait. There is more.

Republican lawmakers in Congress, particularly Senator Charles Grassley (R-Iowa), have said ‘not so fast’ on letting LightSquared deploy its network. LightSquared has ties to influential members of the Democratic Party, and it is believed by some that, as a result, their licensing received favorable treatment. Senator Grassley, in a recent letter to FCC Chairman Julius Genachowski, is quoted as saying, “At no point has the FCC addressed who will pay to retrofit every single federal, state, and local government GPS receiver, which will require a filter as a result of interference.”

Plus, on October 3, GPS market leader Trimble issued a statement by Jim Kirkland, Vice President and General Counsel of Trimble in response to a recent statement by LightSquared General Counsel Curtis Lu. After highlighting what he believes were several LightSquared incorrect readings of the record, he stated that:  

“Mr. Lu’s brief quotations from Trimble SEC filings are not relevant to what the FCC did or didn’t authorize LightSquared to do. GPS receivers are potentially affected by many spectrum uses, not just mobile satellite services, and identifying the risks of interference in SEC disclosures is simply good business practice. These disclosures certainly do not mean that Trimble is obligated to accept such interference, and Trimble diligently opposes interfering uses like LightSquared’s.”  

Prior to that, the statement also makes an interesting point that if MSS was deemed a valuable use for terrestrial purposes as LightSquared is contending, then the FCC should have auctioned off the spectrum. The language is pretty blunt: “FCC rules have always prohibited MSS terrestrial operations from interfering with GPS. So calling GPS equipment designed to take into account FCC rules and policies in place at the time ‘deficient’ is self-serving and baseless across-the-board.”

 In other words, the Commission missed an opportunity to obtain billions of dollars and now appears to be tilting the playing field toward a single business entity for what Trimble says are troublesome reasons.  This is clearly a point not lost on Senator Grassley.

As Oliver Hardy used to utter to his comic side-kick Stan Laurel, “That’s another fine kettle of fish you’ve gotten me into.”

Because getting clarity on this is now a key ingredient of a boiling political stew, it is pointless at this juncture to speculate on the outcome. However, given all that is at stake —serving rural areas with wireless broadband, creating a competitive national wireless broadband alternative that can offset the possible merger of AT&T/T-Mobile, dealing with real interference issues for millions of commercial users as well as the military, pilots and meteorologists, billions of dollars, etc. — this is not just another industry dust up.  Attention must be paid, and we will keep you abreast as this plays out.