WASHINGTON — A proposed wireless broadband network that would provide voice and Internet service using airwaves once reserved for satellite-telephone transmissions should be shelved because it interferes with GPS technology, the Federal Communications Commission said Tuesday.
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Kevin Wolf/Associated Press
Philip Falcone, a prominent New York hedge fund manager, is the majority owner of LightSquared.
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The F.C.C. statement revokes the conditional approval for the network given last year. It comes after an opinion by the National Telecommunications and Information Administration, which said that “there is no practical way to mitigate the potential interference at this time” with GPS devices. The telecommunications and information agency oversees telecommunications policy at the Commerce Department.
The news appears to squash the near-term hopes for the network pushed by LightSquared, a Virginia company that is majority-owned by Philip Falcone, a New York hedge fund manager.
LightSquared said on Tuesday that the testing of the network was “severely flawed.” It “remains committed to finding a resolution with the federal government and the GPS industry to resolve all remaining concerns,” the company said in a statement.
The company said it “profoundly disagrees” with the results of the testing, which was done by a national engineering group, and the telecommunication agency’s opinions, “which disregard more than a decade of regulatory orders, and in doing so, jeopardize private enterprise, jobs and investment in America’s future.”
The F.C.C., which had granted a conditional approval to LightSquared to go ahead with its network pending the results of more testing, will now propose barring near-term deployment of the LightSquared system, the F.C.C. said. The commission will issue a request for public comment on the proposed action on Wednesday.
LightSquared has argued that its network would have relieved a potential “spectrum crunch” and created billions of dollars of investment and thousands of jobs in support of President Obama’s push to expand wireless Internet access around the country.
The network has been opposed by organizations and industries that make heavy use of GPS systems, including the military, aviation, construction and agriculture.
After earlier negative test results, LightSquared had proposed using only land-based transmitters and receivers, rather than satellites, to transmit broadband signals over a narrow slice of the satellite airwaves. The company intended to build a wholesale network, selling access to other companies that provide broadband service directly to consumers.
The telecommunications and information agency said tests showed that even a scaled-back version of the company’s wireless network would interfere with GPS signals and systems.
Interference of LightSquared’s signals with GPS systems is a tricky issue for the F.C.C., telecommunications experts say, because the interference appears not to be the fault of LightSquared. The most commonly used GPS receivers tend to pick up signals from outside of the segment of spectrum designated for GPS.
Because the satellite-telephone segment of airwaves, used by LightSquared, is next to the GPS band on the electromagnetic spectrum, GPS devices will frequently hear those extraneous transmissions.
The F.C.C. could have told GPS users and systems manufacturers that they were at fault for letting their devices stray into nearby airwaves, but that would mean overhauling an industry now in widespread use.
Jeff Carlisle, LightSquared’s executive vice president for regulatory affairs and public policy, wrote on the company’s blog this week that the GPS industry had apparently become “too big to fail,” seeking protection from the federal government for its own mistakes.
“GPS manufacturers have been selling devices that listen into frequencies outside of their assigned spectrum band — namely into LightSquared’s licensed band,” Mr. Carlisle wrote. “The GPS industry has leveraged years of insider relationships and massive lobbying dollars to make sure that they don’t have to fix the problem they created.”
Opposition to LightSquared’s network has come from the Pentagon and military industries, as well as from commercial companies like John Deere, whose advanced farm equipment uses GPS systems.
Last July, the Federal Aviation Administration issued a report saying that it would take 10 years for the civil aviation industry to design, develop, certify and install modified GPS equipment in the nation’s fleet of commercial and private jets.
But in January, after initial results of the latest round of testing began to appear in the media, LightSquared conducted a conference call with reporters in which the company’s executives said the testing requirements were aimed at producing a failing result and that members of the advisory board overseeing the testing “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.”
Mr. Falcone’s hedge fund, Harbinger Capital Partners, lost more than 46 percent of its value last year because of declines in the value of LightSquared, a private company whose shares do not actively trade.
Harbinger marked down the value of its LightSquared investment by 50 percent in December, a move that came after a 9 percent markdown earlier in the year. The New York Times reported earlier this month that LightSquared accounted for an estimated 60 percent of Mr. Falcone’s fund.
Late last year, Mr. Falcone received a Wells Notice from the Securities and Exchange Commission, an action the agency typically takes when it is planning enforcement proceedings against a firm or individual. The Times reported in December that the S.E.C was investigating whether Harbinger agreed in 2009 to allow Goldman Sachs to withdraw up to $50 million from the firm’s hedge funds, while not striking similar deals with other clients.
In a federal filing disclosing the issue, Harbinger said that it was “disappointed” about the notices, and that it would “vigorously defend against” any formal charges.
Mr. Falcone was part of an investment group that bought 19 percent of the common stock of The New York Times Company and in 2008 reached a deal to award the group two new seats on the company’s board. The group urged the company to begin selling assets to help increase the stock price. One of the two directors has since left the board.
Enlarge This Image
Kevin Wolf/Associated Press
Philip Falcone, a prominent New York hedge fund manager, is the majority owner of LightSquared.
Related
The F.C.C. statement revokes the conditional approval for the network given last year. It comes after an opinion by the National Telecommunications and Information Administration, which said that “there is no practical way to mitigate the potential interference at this time” with GPS devices. The telecommunications and information agency oversees telecommunications policy at the Commerce Department.
The news appears to squash the near-term hopes for the network pushed by LightSquared, a Virginia company that is majority-owned by Philip Falcone, a New York hedge fund manager.
LightSquared said on Tuesday that the testing of the network was “severely flawed.” It “remains committed to finding a resolution with the federal government and the GPS industry to resolve all remaining concerns,” the company said in a statement.
The company said it “profoundly disagrees” with the results of the testing, which was done by a national engineering group, and the telecommunication agency’s opinions, “which disregard more than a decade of regulatory orders, and in doing so, jeopardize private enterprise, jobs and investment in America’s future.”
The F.C.C., which had granted a conditional approval to LightSquared to go ahead with its network pending the results of more testing, will now propose barring near-term deployment of the LightSquared system, the F.C.C. said. The commission will issue a request for public comment on the proposed action on Wednesday.
LightSquared has argued that its network would have relieved a potential “spectrum crunch” and created billions of dollars of investment and thousands of jobs in support of President Obama’s push to expand wireless Internet access around the country.
The network has been opposed by organizations and industries that make heavy use of GPS systems, including the military, aviation, construction and agriculture.
After earlier negative test results, LightSquared had proposed using only land-based transmitters and receivers, rather than satellites, to transmit broadband signals over a narrow slice of the satellite airwaves. The company intended to build a wholesale network, selling access to other companies that provide broadband service directly to consumers.
The telecommunications and information agency said tests showed that even a scaled-back version of the company’s wireless network would interfere with GPS signals and systems.
Interference of LightSquared’s signals with GPS systems is a tricky issue for the F.C.C., telecommunications experts say, because the interference appears not to be the fault of LightSquared. The most commonly used GPS receivers tend to pick up signals from outside of the segment of spectrum designated for GPS.
Because the satellite-telephone segment of airwaves, used by LightSquared, is next to the GPS band on the electromagnetic spectrum, GPS devices will frequently hear those extraneous transmissions.
The F.C.C. could have told GPS users and systems manufacturers that they were at fault for letting their devices stray into nearby airwaves, but that would mean overhauling an industry now in widespread use.
Jeff Carlisle, LightSquared’s executive vice president for regulatory affairs and public policy, wrote on the company’s blog this week that the GPS industry had apparently become “too big to fail,” seeking protection from the federal government for its own mistakes.
“GPS manufacturers have been selling devices that listen into frequencies outside of their assigned spectrum band — namely into LightSquared’s licensed band,” Mr. Carlisle wrote. “The GPS industry has leveraged years of insider relationships and massive lobbying dollars to make sure that they don’t have to fix the problem they created.”
Opposition to LightSquared’s network has come from the Pentagon and military industries, as well as from commercial companies like John Deere, whose advanced farm equipment uses GPS systems.
Last July, the Federal Aviation Administration issued a report saying that it would take 10 years for the civil aviation industry to design, develop, certify and install modified GPS equipment in the nation’s fleet of commercial and private jets.
But in January, after initial results of the latest round of testing began to appear in the media, LightSquared conducted a conference call with reporters in which the company’s executives said the testing requirements were aimed at producing a failing result and that members of the advisory board overseeing the testing “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.”
Mr. Falcone’s hedge fund, Harbinger Capital Partners, lost more than 46 percent of its value last year because of declines in the value of LightSquared, a private company whose shares do not actively trade.
Harbinger marked down the value of its LightSquared investment by 50 percent in December, a move that came after a 9 percent markdown earlier in the year. The New York Times reported earlier this month that LightSquared accounted for an estimated 60 percent of Mr. Falcone’s fund.
Late last year, Mr. Falcone received a Wells Notice from the Securities and Exchange Commission, an action the agency typically takes when it is planning enforcement proceedings against a firm or individual. The Times reported in December that the S.E.C was investigating whether Harbinger agreed in 2009 to allow Goldman Sachs to withdraw up to $50 million from the firm’s hedge funds, while not striking similar deals with other clients.
In a federal filing disclosing the issue, Harbinger said that it was “disappointed” about the notices, and that it would “vigorously defend against” any formal charges.
Mr. Falcone was part of an investment group that bought 19 percent of the common stock of The New York Times Company and in 2008 reached a deal to award the group two new seats on the company’s board. The group urged the company to begin selling assets to help increase the stock price. One of the two directors has since left the board.
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