LightSquared Sprint Contract Terminated

LightSquared-Sprint Contract Terminated; Business Case for GPS Threat Ends

March 16, 2012

Source:  gpsworld.com

The principal business prop under the LightSquared plan for ancillary terrestrial component (ATC) broadcast of a powerful signal that would have disrupted GPS operations dropped out from under the company on March 16, as wireless carrier Sprint terminated its $9 billion agreement with LightSquared. LightSquared had several such partnership agreements, but the Sprint deal was the largest, and in many eyes the driver of the aggressive plan. With it gone, LightSquared's other deals will likely dissipate — and the current threat, at least, to GPS industry and users should effectively go away.

Sprint has apparently concluded that LightSquared has no prospect of reversing the revocation of its conditional waiver last month by the Federal Communications Commission, as a result of extensive testing conducted by the company, various government agencies, and the GPS industry. Earlier, Sprint had twice extended its tentative agreement with LightSquared as the tests took place over the last year, but reached the end of its road March 16 — which is also the last day the FCC is accepting public comments on its decision to revoke the waiver.

An official LightSquared statement said termination of the Sprint agreement was "in the best business interests of both companies, and was not unexpected given the regulatory delays." Sprint will return $65 million in prepayments that LightSquared made to Sprint.

Some analysts have predicted that LightSquared may be forced to sell off its assets by the end of the year. Among these assets are the spectrum licenses for the lower LightSquared band (1526–1536 MHz), the so-called Low 10, and the higher band (1545-1555 MHz), known as the Upper 10, adjacent to GPS L1. These bands have a history of trading hands as their owners go into bankruptcy or otherwise out of business.

The next touchpoint of concern for the GPS community is the outcome or perhaps various outcomes of the FCC workshop on spectrum efficiency and receivers that took place earlier this week, March 12–13. The workshop was convened to discuss the characteristics of receivers and how their performance can affect the efficient use of spectrum and opportunities for the creation of new services, according to the FCC.

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