FCC Snatches & Halts Use of Radio Bands by LightSquared
When Phil Falcone’s model for a satellite phone business didn’t work out, the New York hedge fund manager decided to use the radio spectrum he had set aside for a ground-based wireless network in hopes of competing with wireless giants AT&T and Verizon.
At the time, the Federal Communications Commission had taken the position that the nation would soon face a severe wireless shortage and decided to give Mr. Falcone a temporary waiver. This temporary waiver allowed him to proceed with his proposed conversion of the spectrum to wireless broadband, into which he, his clients and lenders invested approximately $4 billion. This week, however, the FCC pulled the permit thanks to complaints from users of the Global Positioning System.
The spectrum that Mr. Falcone intended to use is close enough to the radio bands used by GPS receivers to make the GPS industry nervous. The industry has complained about the potential for interference, though Mr. Falcone says that the makers of GPS gear should have shielded their devices knowing that those bands would not remain vacant forever.
Knowing what they were up against, LightSquared was more than willing to compromise in order to move ahead, but the global-positioning industry had no incentive to work with them and has no interest in taking on the expense of redesigning its devices to withstand interference from other channels. It seems that the global-positioning industry has claimed their stake in the adjacent bands by refusing their use to others,
with little cost to them. The global-positioning company was, of course, assisted by lobbyists from AT&T and Verizon who didn’t want to compete with LightSquared, but who will one day likely go after the same spectrum for their own use.
AT&T and Verizon will have competition, though, as it already appears that Carl Icahn and David Tepper are positioning themselves to scoop up Mr. Falcone’s spectrum if LightSquared files bankruptcy.