Et tu, FCC?
The promise of a unique network sharing approach between Sprint Nextel
Last June Sprint and LightSquared shook hands on an 15-year agreement to divvy up the costs of building a 4G LTE network. The deal was worth $9 billion to Sprint as the builder and operator of the network, and could have ended up saving LightSquared around $13 billion. LightSquared's job was to supply the wireless spectrum, but it ended up being LightSquared' s spectrum that caused the deal's demise.
LightSquared's spectrum is in a frequency range used by communications satellites. Unfortunately, those frequencies are very close to those used by the Global Positioning System. When the LightSquared frequencies are transmitted via satellite, by the time they reach earth they have been weakened enough not to interfere with GPS frequencies. However, those signals are much stronger in a terrestrial cellular network -- strong enough to interfere with GPS devices.
At least that is what the Federal Communications Commission has concluded, and last month it decided not to allow LightSquared to go forward with its plans. Unfortunately, the Sprint-LightSquared collaboration was dependent on the LightSquared frequencies getting FCC approval. The original deadline for that approval was New Year's, but the stakes are so high for both companies that Sprint extended it to March 15.
Since the FCC decision, LightSquared has cut almost half of its workforce and its CEO has resigned. The company has also failed to make a $56 million payment to satellite operator Inmarsat, its partner.
LightSquared's trials with the FCC also had an impact on DISH Network
With LightSquared finally looking like its totally out of the picture, Clearwire
Calamity Clearwire, though, never seems far away from bad news. Google
But LightSquared should, like Caesar, beware the Ides of March.
All mobile carriers need the latest gear for their customers. No matter the fortunes of the individual carriers, there are three companies that provide the essential pieces needed to keep up with the explosion in smartphone demand. Click here for a free in-depth report on those companies -- it won't be around long!
Fool contributor Dan Radovsky has no financial position in the above-mentioned companies. The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
Sprint Acquires Clearwire After Stockholders Approve Merger
Sprint's merger with Clearwire passed its final test with Clearwire's minority stockholders voting to approve the transaction.
FCC OKs Sprint and Clearwire Deals
The wireless providers gain regulatory approval for both acquisitions.
Always a Bridesmaid, Never the Bride: Where Will DISH Turn Now?
DISH Network gave up on two high-stakes wireless options, leaving both to be gobbled up by a Japanese network. Where will Dish set its wireless sights next?