In a report filed by Reuters, LightSquared majority stakeholder Philip Falcone has admitted to the newswire service that the beleaguered mobile broadband service is considering filing for reorganization after recent efforts to launch the network have been met with roadblocks since the FCC rejected the network due to multiple tests confirming that the network would cause substantial interference to the GPS infrastructure both on the transmission and reception side for users.
The original plan for LightSquared once it received its provisional waiver from the FCC in 2010 was to utilize L band radio spectrum originally intended for a satellite-based mobile broadband network and using it to set up a nationwide terrestrial network. LightSquared had also originally planned to complete the network buildout by itself until numerous delays resulting from municipality opposition and contractor disputes almost led to the project nearly collapsing before restarting in earnest last year.
The stillborn carrier recently lost its network and spectrum sharing agreement with Sprint last month after the expected reconsideration and approval by the FCC did not come to pass, which led LightSquared to prepare for litigation against the regulator alleging that the FCC did not have the authority to restrict LightSquared from launching services as it expected by the second quarter of this year before the FCC filed the rejection. LightSquared even went as far as accusing the FCC of illegal actions by denying it the permission it sought to roll out commercial service.
To add to LightSquared’s issues, the company has laid off 45% of its staff and is operating with an interim CEO/CTO while Harbinger Capital Partners shareholders are filing their own litigation against Falcone for the investment losses incurred by the carrier not being operational, as Harbinger holds the majority and largest stake in the company.
With LightSquared looking to regroup after the recent tribulations with federal regulators, what remains to be seen is whether the carrier can even make it past the summer as all of the carriers that it previously signed lease agreements with are rushing towards Sprint and Clearwire looking to obtain wholesale lease agreements for LTE access and the carrier continually struggles with mounting losses.
The LightSquared situation also shines a light on the current divide in the wireless industry in regards to the scarcity of of spectrum for wireless networks and the idea of the “spectrum crunch”, as mobile networks in general are scrambling to find enough spectrum to roll out their own 4G networks with varying degrees of success, as evidenced by LTE networks from MetroPCS and Sprint which will utilize reclaimed existing spectrum holdings rather than rely on spectrum purchases. As carriers fight amongst each other for spectrum, the LightSquared situation may demonstrate that the last few years of rubberstamped spectrum purchases are over and done with, leaving only bitter bickering and legal wrangling in its wake.
