LightSquared: Blocking wireless plan would disrupt spectrum market

Blocking LightSquared from building its nationwide wireless network over concerns that it interferes with global-positioning systems would set a disruptive precedent for the spectrum market, the company said on Tuesday.

LightSquared released a study by Brattle Group economist Coleman Bazelon arguing that if the Federal Communications Commission sides with the GPS industry, the entire wireless market would face greater uncertainty. That could devalue all spectrum, he said.

"By revoking LightSquared's authority, the FCC would introduce the possibility that future license allocations may also be revoked," Bazelon wrote in the report, which was commissioned by LightSquared. That could deter new companies from entering the market, he said.

"Added uncertainty about the security of license rights could make many wireless-broadband investments less attractive to investors than they would otherwise be.... Consequently, these negative economic impacts on wireless-industry growth would be amplified throughout the economy," Bazelon concluded.

Tests have found that LightSquared's planned nationwide, wholesale wireless network would interfere with GPS devices. The company, which is awaiting FCC approval, says that the interference results from GPS devices "looking" into LightSquared's spectrum.

Some in the GPS industry have argued that LightSquared's band of spectrum should be used as a buffer zone to prevent interference with navigation devices. But Jeff Carlisle, vice president of public policy and regulatory affairs for LightSquared, said that would completely change the way the FCC manages spectrum.

"For the first time ever, the FCC would say you can have squatter's rights to spectrum simply by creating a wide-open receiver," Carlisle told reporters on Tuesday.

But Jim Kirkland, vice president of GPS manufacturer Trimble and a founding member of the Coalition to Save Our GPS countered that LightSquared is trying to change the rules.

"Having failed to establish that it can operate without causing interference to GPS, LightSquared is now trying to change the subject to spectrum policy," he said in an e-mail statement. "And now it is trying to get the FCC to change its policies in a way that will dramatically increase the value of [LiightSquared's] satellite spectrum holdings, solely for its own private benefit."

The Brattle Group's new study is based on the "faulty premise" that blocking LightSquared's plan would be changing its FCC license, Kirkland said. "This is simply not the case. FCC rules have always prohibited terrestrial interference to GPS."

LightSquared has agreed to delay using the spectrum closest to that used by GPS, but critics say that doesn't solve the problem.

The FCC must give LightSquared the green light before the company can make its network operational.