Satnews Daily
February 15th, 2012

Northern Sky Research (NSR)... U.S. Connectivity Clobbered By The FCC (SATCOM)

[SatNews] With a statement issued by one of its officials, the FCC yesterday all but negated years of work from both the FCC and the mobile satellite industry.... developing a hybrid satellite-terrestrial system to offer connectivity across North America. LightSquared could not proceed with its LTE network due to GPS interference issues. This is somewhat the picture that NSR envisaged in its study Mobile Satellite Services, 7th Edition when it described “….several key announcements and major changes in the regulatory environment expected to take place in 2011” that led NSR to stop forecasting the MSS-ATC market.

There will be a lot of things said about undoing what the FCC did in 2003 to promote seamless connectivity across the United States by this decision, but lo and behold… there is still spectrum left after this saga that the U.S. desperately needs to use, but not for an MSS-ATC system... for now anyway. NSR re-affirmed its belief that “…a market of any significance for integrated dual-mode MSS-ATC devices is unlikely to occur in the foreseeable future “ due to mounting challenges the industry has faced. NSR identified the GPS industry’s challenges to the FCC allowing LightSquared to deploy 40,000 base stations as the major regulatory development impacting the satellite communications industry in North America. Even with support, albeit tenuous, from Sprint, LightSquared’s story was going nowhere fast and may end up as another example of a good idea gone wrong.

Starting with Globalstar’s revocation of their ATC licensing agreement with OpenRange in 2010, to the GPS adjacent frequency interference issues, the MSS-ATC marketplace fell out favor in terms of regulation and business cases after garnering support from a financial powerhouse such as Harbinger Capital Partners and seeing billions of dollars spent on satellites and ground infrastructure to meet stringent FCC gating requirements. Even if DISH acquired MSS-ATC S-band spectrum from bankrupt TerreStar and DBSD, it still has to find a way to get the FCC to agree to a well thought-out plan to gain significant revenues from a dual satellite and terrestrial network. It is therefore doubtful that it could be interested in the LightSquared spectrum, which needs more thoughtful planning from the operators as well as the FCC to operate in the vicinity of GPS frequencies.

Saying that ‘…it could take years for current generation GPS devices to be replaced with modern, robust systems”, NSR noted in its study that the MSS-ATC gloomy future was a result of lack of general investor support for operators who in turn failed to deliver on promises to regulators and shareholders, missed satellite operations deadlines, and ultimately did not prove convincingly that what is technically possible is sometimes not practically feasible.

LightSquared will probably go back to its satellite-only business plans or try to sell its assets before going under. But with bandwidth being scarce, many wireless operators will be on the lookout as regulatory and business environments for L-band take time to resolve. Because of these delays, DISH, which has yet to figure out how to deploy its own ATC network, will probably not buy LightSquared unless it's for pennies on the dollar. And even if it did, it could present a severe case of monopoly in the U.S. MSS market.

All there is left from this battle is valuable spectrum that can eventually be cleaned-up of GPS interference issues. Perhaps then a 'beauty' contest for this precious asset for the mobility segment could be held for another operator to snap it up and take it down another road.