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Is LightSquared Dead, or Just Pining for the Fjords?

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"He's kicked the bucket, he's shuffled off this mortal coil, run down the curtain and joined the bleedin' choir invisible! This is an ex-network!"

"I'm not dead."

Forgive me for stitching together bits and pieces of two different Monty Python classics, but that's how I envision Phil Falcone's LightSquared mobile network right now. There's just no better way to describe it.

In 2011, the network was supposed to relieve Clearwire (Nasdaq: CLWR  ) of high-speed data duties on behalf of Sprint Nextel (NYSE: S  ) . Sprint wanted an alternative to Clearwire's WiMax-based services, and LightSquared promised to blanket the nation in LTE-compatible airwaves using a novel mix of technologies.

But the deal fell apart as the FCC found that LightSquared's proposed network would trample all over the increasingly important GPS frequencies. Not by overlapping, but by shouting right next to the GPS whispers, making it impossible for the weaker signal to be detected in many cases. That's a deal-breaker, dude.

The company is bankrupt and seemingly opt of options. But it's not entirely dead yet. Is LightSquared just pining for the fjords?

That possibility is raised by a brand-new request filed with the FCC. In it, LightSquared proposes a new structure of wireless radio wave usage, leaving a buffer zone next to the sensitive GPS signals.

The buffer is so wide, LightSquared would give up two-thirds of its assigned spectrum. In return, the company is asking to use another chunk of spectrum currently licensed to government agencies, bringing the total service to about two-thirds of the original allotment if everything is approved. A bigger slice of spectrum translates into faster and more reliable networks, so the size of the assignment is a big deal.

But a little bit of spectrum would surely be better than nothing at all, right? LightSquared's satellite-backed LTE network might be slower than competing solutions from AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) , or indeed Clearwire's pair of radio networks, but you can't compete with its nearly complete coverage map. Even a weaker network could do well in underserved spaces like the rural Midwest, where tower-based networks just aren't cost-effective.

So this Norwegian Blue might live to fight another day. Given its weakened state, I'm not sure it's worth the effort, but Phil Falcone seems to disagree.

In all fairness, Falcone is fighting for a position in the trillion-dollar mobile computing revolution. His company doesn't look like a winner, but the Fool has uncovered a sure bet in this race. Read all about this exciting stock in a special report, free to Fools for a limited time.


Fool contributor Anders Bylund holds no position in any of the companies mentioned. Check out Anders' holdings and bio, or follow him on Twitter and Google+. The Motley Fool has a disclosure policy.

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Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 02, 2012, at 2:49 PM, spokanimal wrote:

    Falcone picked up his spectrum cheap... because it's purposed for satellite transmission right there next to the GPS bands... if it had been appropriate for cell towers, he would have had to pay way more for it.

    Falcone HOPED he could ram through a "re-purposing" of that spectrum for his terrestrial LTE network buy buying political favors among the D.C. elite... thus scoring a windfall by reaping a 10-fold increase in the value of his spectrum and blasting out LTE signals to the detriment of GPS.

    Now, he wants to give up 2/3 of his cheaply acquired spectrum in a swap for taxpayer-owned spectrum and STILL make a zillion dollars via "political opportunism" rather than good old fashioned, American, sweat and hard work.

    What we all need to remember is that Falcone is a CHUMP... a guy who will jawbone any politician and steam-roll any law-abider to make money and be famous...

    ... he's the poster child for everything I hope America NEVER becomes.


  • Report this Comment On October 02, 2012, at 6:28 PM, zanajohn1 wrote:

    Hesse to subsidiary CLWR: "Please prepare to get thrown under the bus again".

  • Report this Comment On October 02, 2012, at 11:05 PM, MattC69 wrote:

    Given your fondness for Monty Python:

    Dead Parrot Sketch

    The cast:


    John Cleese


    Michael Palin


    The sketch:

    A customer enters a pet shop.

    Mr. Praline: 'Ello, I wish to register a complaint.

    (The owner does not respond.)

    Mr. Praline: 'Ello, Miss?

    Owner: What do you mean "miss"?

    Mr. Praline: I'm sorry, I have a cold. I wish to make a complaint!

    Owner: We're closin' for lunch.

    Mr. Praline: Never mind that, my lad. I wish to complain about this parrot what I purchased not half an hour ago from this very boutique.

    Owner: Oh yes, the, uh, the Norwegian Blue...What's,uh...What's wrong with it?

    Mr. Praline: I'll tell you what's wrong with it, my lad. 'E's dead, that's what's wrong with it!

    Owner: No, no, 'e's uh,...he's resting.

    Mr. Praline: Look, matey, I know a dead parrot when I see one, and I'm looking at one right now.

    Owner: No no he's not dead, he's, he's restin'! Remarkable bird, the Norwegian Blue, idn'it, ay? Beautiful plumage!

    Mr. Praline: The plumage don't enter into it. It's stone dead.

    Owner: Nononono, no, no! 'E's resting!...

    I equate LS2 to the parrot - I guess E's resting.

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