No room to share? LightSquared vs GPS spectrum feud

No room to share? LightSquared vs GPS spectrum feud

The tension in the US is mounting as the regulatory battle between LightSquared and the global positioning system (GPS) industry continues, adjudicated by the Federal Communications Commission (FCC).

With a plethora of tests conducted by all affected parties, Lightsquared has finally proposed what it hopes will be an acceptable compromise to the existing impasse, although it was not couched in the most conciliatory language.

The FCC’s decision will not only directly impact the future of the heavily-invested LightSquared, but will affect the shape of the US telecoms market and the GPS community, and could influence the allocation of spectrum on a global basis.

LightSquared has embarked upon an ambitious plan to build a 4G-LTE network which will provide coverage to 92% of the US by 2015. The network will combine satellite technology and a ground-based wireless communications network, both using the same 1.5 to 1.6GHz L-band radio spectrum. LightSquared chairman and CEO Sanjiv Ahuja has described the plan as “a nationwide network that will introduce world-class broadband service to rural and underserved areas”. Services were initially planned to begin on its network next year, with the aim of providing terrestrial wireless coverage to at least 100 million people by the end of 2012, to 145 million people by the end of 2013, and to 260 million people by the end of 2015.

LightSquared was founded by Philip Falcone, a hedge fund manager. In July 2010, his hedge fund award a $7 billion contract to Nokia Siemens Networks to supply the terrestrial base stations for LightSquared’s network. LightSquared has since obtained $2.3 billion of funding over the last 12 months, and is now working with Alcatel-Lucent on a satellite interface. Total costs for its satellite-cellular network are estimated to reach $14 billion.

Despite the breadth of LightSquare’s vision and the depth of its financing, the company has hit a problem. The L-band spectrum it proposed to use for LTE is immediately adjacent to the 1559-1610MHz spectrum band used for the signals between GPS satellites and GPS receivers, which include aviation, cellular, general location and navigation, high precision, networks, space-based receivers and GPS timing receivers. There was concern that high-powered signals from LightSquared’s ground-based transmitters would overpower the comparatively weak GPS signal from space.

The debate between the two parties has been loud and colourful, with the formation of a strongly-spoken “Coalition to Save Our GPS”. The GPS industry hasn’t hesitated to highlight a number of emotive possibilities which could be generated by the loss of GPS capability – affecting aircraft in northeastern US, the US coast guard, and scientific and consumer systems.

Nevertheless, on 26 January, 2011 the FCC gave LightSquared conditional approval to build its ground-based wireless network, although it would not be allowed to activate the network until the interference issues were resolved. Accordingly, it required LightSquared and partners from the GPS industry to form a technical working group to test interference and propose ways to mitigate it. LightSquared committed $20 million to this working group, which has been issuing monthly reports since 15 March, 2011 and produced its final report on 1 July, 2011.

The tests have highlighted significant levels of interference. Most alarming, the National Telecommunications and Information Agency (NTIA) has issued a report by the National Executive Committee for Space-Based Positioning, Navigation and Time Systems Engineering Forum (EXCOM), a federal engineering advisory group. This found that the wholesale LTE deployment “poses a significant potential for harmful interference”, and could cause a severe operational impact over significant regions of the US. It considered the potential interference problems to be so bad that it would result in the “degradation or loss of GPS” at distances of “a few kilometres extending to space operations”. The group also provided a classified report on the possible impact on military GPS signals. The NTIA recommended that LightSquared “should not commence commercial services”.

While EXCOM conceded that there were possible fixes, these would require significant upgrades to GPS equipment or indeed its complete replacement. It estimated that these changes could take somewhere in the region of 10 to 15 years.

However, there has also been significant support for LightSquared’s plan, with around 30 interested parties supporting the concept that a combination of satellite and ground-based services is the only way to realistically provide national broadband in the US.

LightSquared has now proposed a number of compromises to the FCC, claiming that its new “middle ground” proposals would address 99% of interference with GPS devices.

LightSquared has proposed that it will agree to a standstill in the use of its upper 10MHz frequencies, which are immediately adjacent to the GPS band. In exchange, it should be allowed to launch operations in the lower 10MHz block of its allotted spectrum, which at 1526-1536MHz is located farther away from GPS frequencies, claiming that this block is “largely free of interference issues”. The lower spectrum block is owned by mobile satellite provider Inmarsat, which holds a co-operation agreement with LightSquared. Inmarsat will support the spectrum plan in exchange for annual payments of $115 million, paid quarterly, for an initial period of five years. LightSquared has also committed to lowering the transmission power in its L-band base stations, using only 50% of the maximum possible transmit power available at 32dBW.

However, the NTIA has responded that using only the lower portion of the L-band spectrum “is not one of the planned Phases for LightSquared network evolution so only limited testing has been conducted under this scenario”, and requested an additional evaluation period of six-months.

LightSquared does admits that in the long term its goal is still to deploy a full complement of terrestrial frequencies operating at appropriate power levels. And while it has proposed a functional compromise, and seems prepared to swallow the costs involved in implementing these changes, it has still hit out at the GPS industry.

It has claimed that GPS device makers should have taken relatively straightforward measures by incorporating appropriate filtering technology to block transmissions from adjacent bands, while instead they have “deliberately or, sometimes, inadvertently, designed or manufactured with the assumption that there would be no adjacent-band terrestrial transmissions”. LightSquared has also accused the GPS industry of “piggy-backing on the federal government’s GPS network without any investment in infrastructure or spectrum”. Its report suggests: “Government could decide that the problem is of the commercial GPS device industry’s making and there will be no bail out.” While that is an unlikely outcome, a recent study by the Brattle Group showed that the commercial GPS industry’s ability to use the US government’s GPS network amounts to an $18 billion federal subsidy. Meanwhile, the Coalition to Save Our GPS calls LightSquared’s proposed compromise “bizarre” and calls it a “hail mary move”.

Nan Chen, president of CENX and MEF, said: “Frequencies are such important resources, and very finite resources, so it’s important to put every single available frequency to good use. About eight years ago, when they were notified by the FCC, the GPS industry should have taken action. All you needed to do was invest a small amount of money, about 11 cents or so, to add a filter to each receiver to filter out other frequencies. But the GPS industry didn’t think it necessary to do that. I think the GPS industry is taking it a little bit overboard.” He spoke strongly in his views that this is a potentially solvable problem, and that this stand-off could be turned into a win-win situation for both sides.

Nevertheless, the stalemate continues, and it is impossible to predict the eventual outcome. Meanwhile, there are a few glimmers of light on the horizon. Bloomberg has leaked the fact that Sprint has signed a deal with LightSquared, suggesting that Sprint will help to “jointly develop, deploy and operate LightSquared’s 4G LTE network” – newspapers have valued this at as much as $20 billion over a 15-year deal. In exchange, Sprint will receive privileged rates as LightSquared’s largest LTE wholesale customer. With AT&T’s proposed acquisition of T-Mobile USA dominating the wireless landscape, this latest alliance is certainly a significant one.

Additionally, Dish Network holds two pieces of S-band spectrum in 2GHz, acquired by buying the assets of DBSD and TerreStar for a combined value of about $2.9 billion. The NTIA obviously sees this as a potential solution, suggesting that: “Rationalising the terrestrial broadband operations by consolidating them in the 2GHz band could resolve existing interference issues.” While no public approaches have been made to date, Dish must certainly feel that it is in possession of a prime piece of spectrum real estate at a very interesting time in the US market.

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