"No Fair!" Says LightSquared

Sprint Nextel (NYSE: S  ) might be stuck with its Clearwire (Nasdaq: CLWR  ) network for the foreseeable future.

The mobile service provider hopes to add privately held LightSquared as a second source of high-speed data networking. But that service is running into regulatory roadblocks and might be dead in the water. LightSquared's proposed 4G-LTE network, backed by a hybrid of earthbound radio towers plus a unique direct satellite uplink, may interfere with GPS devices.

Sprint has extended LightSquared's deadlines for FCC approval, but another month might not be enough. Last week, a White House committee said that the network is an impossible dream.

The National Space-Based Positioning Navigation and Timing Committee reached a "unanimous conclusion" that there are no real, workable fixes for the GPS interference problems that would arise. This recommendation, which basically closes the book on LightSquared and doesn't even ask for new solutions or further testing, is an important piece of information when the FCC makes its final verdict on the situation.

But of course, LightSquared can't afford this very depressing outcome. The company sees the committee report as evidence of a "systemic pattern of bias and collusion." LightSquared claims that, "Members of the PNT Advisory Board have deep ties with the same GPS manufacturers who have sold poorly designed equipment to America's farmers, public safety officials, military and government agencies."

The committee includes a board member of GPS maker Trimble Navigation. LightSquared alleges that this inappropriate industry connection led the committee to use unrealistically strong power levels and outdated GPS receivers in their testing, which stacked the deck against LightSquared and "nearly guaranteed failure."

The company is asking for another round of fair and unbiased testing, and believes that technological solutions to the GPS problem are within reach. Also, the company has owned spectrum licenses for eight years, so boo on the GPS industry for not planning around the issue already!

Knocking out GPS receivers nationwide is a political and commercial impossibility. Can LightSquared and Sprint scramble up a new testing report and sell their conclusions to the FCC before it's too late? ClearWire sure hopes they won't. Don't take your eye off this high-stakes drama. Just click here to add a few key players to your watchlist, and you'll be sure to catch every play as it happens.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.


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  • Report this Comment On January 17, 2012, at 6:44 PM, cjmac136 wrote:

    "Sprint Nextel (NYSE: S ) might be stuck with its Clearwire (Nasdaq: CLWR ) network for the foreseeable future."

    As if that's a bad thing...CLWR has an existing network which TD-LTE can be laid over for $600M and cover 80% of their POP's. Much cheaper than almost any other alternative to be had. Add to that, access to the largest single block of spectrum that can be used for a data network and I believe your lead should have read

    "Sprint Nextel in the strongest position possible to capture market share from AT&T and VZ with no more distraction from Lightsquared."

    Regards,

  • Report this Comment On January 17, 2012, at 9:54 PM, 61Vibes wrote:

    @ cjmac136...Dude...that headline rocks!

    It boggles my mind that so much spin is spun negatively towards CLWR. A headline such as that brilliant one of cjmac, and more like them could change everything. Completely different headlines for the same story.

    I would agree, however, it does appear that Falcone is being jettisoned into deep space by the powers that be...space junk!

    look at the verbiage here

    "...Committee reached a "unanimous conclusion" that there are no real, workable fixes for the GPS interference problems that would arise."

    Umm...so much for the idea that innovation may exist somewhere in these cosmos. Those words are a door slam and imply that the whole idea is impossible. We are talking about communicating through space here...it happens...but I'm certain it was only recently dreamed possible.

    At least this mess here will force Sprint to have a closer look at their old friend CLWR they left hangin' a while back.

    CLWR has everything necessary to solve the near term bandwidth drought. Sprint should be tapping into that spigot with a big hose and delivering REAL 4G, rather than that fake stuff most providers are calling 4G. I do believe that CLWR still is the only player capable of delivering genuine 4G...which would include the ability to transfer data, sound, streaming video and...LIVE video simultaneously both in and out of a device. Right now, i don't think live video with sound is possible without a buffer. correct me if I am wrong plz.

    I still think that cjmac has the right idea for a headline.

  • Report this Comment On January 17, 2012, at 10:31 PM, 61Vibes wrote:

    After more thought on this, I wonder how other followers of this subject feel about the GPS, the spectrum it uses, the "interference" it is subject to, and the duties of the stewards of the systems that make it work.

    Where does the responsibility lay? For interference issues, which could also be security issues, possibly national or even world security risks are perceivable. It seems to me it would be in the best interest of everyone if the folks who control the GPS systems were to come up with a protocol of their own to encapsulate the GPS systems, as well as protocol for others to use the available bandwidth safely without interference.

    It could be viewed that Falcone's project has exposed a weak spot in the GPS architecture...if Falcone's stuff can foul it up then so can anyone's stuff.

    If someone enters your house with a key that fits the lock, you need to change the lock if you don't want them to come in anymore, but you can't put a fence around the whole neighborhood...ya know?

  • Report this Comment On January 17, 2012, at 11:54 PM, jhf678 wrote:

    Good for Sprint. They can save a lot of money and increase their profit by staying with Clearwire.

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