The Wireless Future Looks a Little Darker Without LightSquared

Most gadgeteers gloss over Federal Communications Commission (FCC) approvals and wireless spectrum news. It?s dry stuff. But there was a big development this week, as the FCC announced that it will block the rise of LightSquared?s new 4G network, a decision that may impact data users (along with our wireless bills) for years to come.

Who Is LightSquared, and What Happened?

LightSquared had a plan. The firm, backed by billionaire Philip Falcone, was to license a piece of the wireless spectrum and use satellites and land antennas to build a 4G network of its very own. This network wouldn?t be owned by the big carriers like AT&T or Verizon. Rather, any company interested in entering the market could license a chunk of it from LightSquared, providing a possible route for smaller companies and startups to compete with the enormous carriers.

LightSquared originally licensed its piece of the spectrum in 2004. In 2011, the FCC gave its tentative approval for LightSquared to begin an eight-year terrestrial build-out, in which the company would team with Sprint in a 15-year deal to share technology and costs. People liked the idea. LightSquared raised roughly $3 billion in investments from Falcone?s Harbinger Capital Partners and other firms within the last two years. Even Best Buy was a signed customer.

Then the National Telecommunications and Information Administration (NTAI) tested the technology.

The NTAI is the member of the executive branch that sees over (and advises the president on) telecommunications policy and manages the federal government?s use of the wireless spectrum. And a big part of its job is working with the FCC to research the effects of proposed legislation on open spectrum.

The agency found that while LightSquared indeed worked as advertised and within the bounds of its license, the signal?which butted up against the radio bands used for GPS?was interfering with dozens of GPS devices such as those found in the navigation systems of some aircraft. Why? Some GPS receivers were actually built to read wireless signals a bit beyond their purview in the spectrum. When the GPS snagged some of LightSquared?s signal, readings went haywire.

So the FCC and LightSquared have reached an impasse. The FCC, starting a dangerous scenario for an indefinite number of GPS users (we still don?t know whether the commission is worried about thousands, hundreds of thousands, or millions of affected devices, though LightSquared claims 99.5 percent of GPS receivers are unaffected), pulled its go-ahead for LightSquared?s network, leaving the company and its network in the lurch. LightSquared has suggested hypocrisy on the FCC?s part, calling out the commission for designating a certain stretch of spectrum for GPS receivers yet allowing those receivers to read signals outside the spectrum, then quashing LightSquared?s plan because GPS devices cross over into its territory.

But GPS was here first. And Lightsquared can?t change the fact that there are GPS units in the field reading the wrong spectrum. It can?t push a firmware fix to third-party GPS devices, especially when firmware might not even be the problem. In a last-ditch effort, LightSquared is even talking to the Department of Defense about swapping wireless frequencies?a solution that sounds like a stretch to say the least.

Why This Is Bad News

LightSquared wasn?t just one more network to compete against the likes of Verizon and AT&T. Its network could have launched many cellphone/wireless Internet providers, all of whom could have licensed LightSquared?s technology on the back end and offered unique cellphones and pricing plans on the front end.

As information becomes more of a commodity and major carriers put tighter restrictions on download limits (as we?ve seen already in the past few years), marketplace competition is key to balance the equation?and LightSquared was poised to sell data wholesale. So for consumers, its potential demise means a marketplace where carriers have a lot more power because of less competition.

But someone could succeed where LightSquared failed, right?

Clearwire, in which Sprint is a majority shareholder, still exists as a wholesale alternative. But LightSquared?s LTE technology is more promising than Clearwire?s existing WiMAX network. Clearwire is updating its network to LTE but may have problems paying for it. And the fact that Sprint chose to invest in LightSquared, rather than doubling down to help its old flame succeed, doesn?t speak well for Clearwire?s future.

Any new company entering the market now would need years to plan and deploy a nationwide wireless network. Even if someone could negotiate more open spectrum, there?s real estate to license and towers to build. We?re simply losing time.

Also, while LightSquared was facing $14 billion in infrastructure investments, its business plan didn't seem like a gamble?not with every American who owns a cellphone as a potential 4G customer. Investment flowed. But who wants to back a pricey startup knowing the FCC could unapologetically pull the plug on any new chunk of open spectrum, even if you?ve played by its rules? The next wave of 4G investors and entrepreneurs may just take their ambitions elsewhere.

Ultimately, the FCC is trying to protect us. GPS makes up an increasingly large part of our transportation infrastructure; this issue is potentially one of public safety. But LightSquared became the whipping boy for sloppy technology that it had nothing to do with. The FCC locked down the airwaves but failed to lock down the technology using those airwaves?a shortsighted move that hurts consumers and, at least for now, appears to have rendered a prime section of the wireless spectrum unusable.

We need properly enforced regulation to ensure that this doesn?t happen again. Because as of today, there?s no reason to think that it won?t. And that sure stinks for tomorrow.

Source: http://www.popularmechanics.com/technology/gadgets/news/why-the-wireless-future-looks-a-little-darker-without-lightsquared-6693231?src=rss

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