Embattled national broadband wireless provider LightSquared, whose innovative network combines 4G LTE (News - Alert) terrestrial service integrated with commercial satellite services, has taken its share of lumps.  

Interests concerned about potential interference with the operation of existing GPS systems — general, embedded in smartphones and high-precision instrumentation —along with politicians, communications and securities regulators, competitors and financial observers have all  taken turns questioning the science, financing and legality of the multi-billion undertaking. Things got decidedly awkward on December 9 with a story by Bloomberg that said 75 percent of devices in a second round of testing by the U.S. government would be interfered with by LightSquared’s (News - Alert) services.  

Today LightSquared responded on multiple fronts saying the story was based on prematurely leaked information that was “selectively misleading.” They called for both an investigation of the leak and fairness in a process which it believes will ultimately validate claims that:

·         It will not interfere with either general or smartphone GPS systems that use the lower band of its spectrum.

·         Has solved the problems associated with interference with the high precision systems that use the higher bands of the LightSquared spectrum.

·         It is legally entitled to use its spectrum that it was granted eight years ago.

Letter of protest

LightSquared Chairman and CEO Sanjiv Ahuja in a letter dated December 12 to Ashton B. Carter, Deputy Secretary U.S. Department of Defense and John D. Porcari, Deputy Secretary U.S. Department of Transportation, in their capacity as co-chairs of the National Executive Committee for Space-Based Positioning, Navigation, and Timing (“ExCom”) which are overseeing the tests, had some strong words on the subject. The letter is too long to quote in its entirety but the highlights include:

Based on Bloomberg (News - Alert) News’ reporting, it is apparent that this leak was intended to damage LightSquared’s reputation, spread false information in the marketplace, and prejudice public opinion against LightSquared before a full and complete analysis of the testing results had been presented to ExCom, NTIA, or the Federal Communications Commission (“FCC”).  LightSquared has suffered serious and substantial injury as a result of this leak...

 Based on our review of Bloomberg News’ reporting, the leak was based on an incomplete, selective, and slanted analysis of the data of the testing of general location/navigation devices.  In its report, Bloomberg News reported that 75% of these devices tested may experience interference with LightSquared’s network.  Based on our own review of the test data, we profoundly disagree with that conclusion.  To achieve that level of threshold of failure, the leaked internal analysis assumes that the power levels of LightSquared networks are 32 times greater than the power levels at which LightSquared will actually operate.

  In addition, throughout the test process, LightSquared has urged the government agencies involved to analyze the test results based on a measurement of the actual power level of LightSquared’s network that will be experienced by GPS devices and not a theoretical model apparently relied upon by the leaked internal analysis. We submitted a formal proposal of this “power on the ground” standard with the FCC on December 7, 2011 (a copy of which is attached).  If this “power on the ground” standard is applied to the test data, LightSquared’s own analysis shows that the vast majority of general location/navigation will experience no interference from LightSquared’s network.  None of LightSquared’s mitigation proposals were provided to Bloomberg News.

 In addition, the NTIA’s letter of September 9, 2011 also requested further testing of cellular devices.  We also understand that the test results show that cellular devices – which represent the largest category of GPS devices in use in the United States – will experience no interference from LightSquared’s network.  This important result was also not provided to Bloomberg News…

 The testing process requested by the NTIA is important not only to LightSquared, but also the GPS industry, GPS users, and the federal government.  The analysis of those test results should be based on a fair and rigorous technical analysis of the data and should not be prejudiced by public opinion distorted by partial and selective leaks.

 However, the leak on December 9, 2011 – which occurred after the testing process was completed – creates for LightSquared serious doubts about the fairness and integrity of the entire process... 

The letter then goes on to request that ExCom issue a public statement saying the information in the Bloomberg story was improperly leaked and does not represent the full findings from the test results.  It also asks that the Departments of Defense and Transportation refer this matter for an immediate investigation to determine the circumstances of this leak and to ensure that responsible individuals are held accountable for their actions. 

As of this writing ExCom and officials at NTIA of have yet to respond to the letter.

Meet the press

For further clarification, and to highlight the factual inaccuracies of the leaked information, LightSquared general counsel Curtis Lu and executive vice president for ecosystem development and satellite business Martin Harriman had a call with the press today and hammered home the assertions in the letter. They noted that this is just the latest in a series selective leaks aimed at undermining LightSquared’s efforts to find solutions to potential GPS interference problems and serve the narrow business interests of a few GPS companies. A few other points either briefly touched upon or not made in the letter were:

• Of 40 cellphones tested, using a very high threshold of 1dB (a decibel level which is a logarithmic unit indicating the ratio of a physical quantity such as power relative to a specified or implied reference level), showed no interference problems. They added that even at 1dB this is a level where an existing GPS would be leaking into the LightSquared spectrum but that even if this level was exceeded there would be no change in the quality of the customer experience. 
• Of the 92 general GPS devices tested, 14 showed greater than 1dB and these tended to be less expensive and older models.  

They equated this to adding an inch of water to a bath tub. Harriman said all of the fuss was the equivalent of saying “an extra foot of water in an 80 foot high damn would cause the dam to fail.” He and Lu also added that the Bloomberg story forgot to say that LightSqaured does not know which of the 14 devices exceeded the 1dB level because that information has yet to be provided them.  They also said the article failed to mention that promising mitigation techniques for the devices in the high precision portion of their spectrum will be submitted for evaluation in the near future which deserve a full and fair evaluation.

The bottom line was a that LightSquared believes that when the dust finally settles, assuming the process is open and fair, that ultimately the facts will prove their network is completely compatible with GPS devices. Lu stated, “We have the right to use our spectrum. When you have facts and law on your side you will prevail.” 

Why is this important?

As stated above, LightSquared is no stranger to controversy.  

In general, there are over 100 million existing general GPS devices and an estimated 650 million smartphones with GPS in the U.S., and roughly 250,000 high-precision instruments which are used in things like airplanes for navigation. In other words, if there is interference this is a potentially big problem.

More specifically, LightSquared holds licenses for extraordinarily valuable spectrum at a time of a troublesome and looming spectrum shortage. And, while FCC Chairman Julius Genachowski (News - Alert) has been a champion of the rapid deployment of a national wireless broadband networks, especially by a new entrant, the treatment of LightSquared by the FCC has (to use a Star Wars movie analogy) caused a disturbance in “The FORCE.” 

In fact, just to stay on the last point, about the politics, on December 9, Senator Charles Grassley (R-Iowa), made a statement about the Securities and Exchange Commission (SEC) sending a Wells Notice to LightSquared investors Philip Falcone and Harbinger Capital Partners concerning possible violations of SEC rules thus casting a shadow on LightSqaured. And, the Senator has complained for months about the FCC’s fast-tracking of the LightSqaured project, threatening to hold up confirmation of candidates to fill two current FCC vacancies until he gets answers as to why LightSquared seems to have gotten preferential treatment by the Commission. 

The simple facts are this is one of the most important activities in the mobile area in many years. The stakes are huge for service providers, device manufacturers, regulators, politicians and (dare I forget) consumers.  It is almost ironic that this is about light squared, it many ways this is about radio frequencies to the Nth power.  

There are a lot of moving parts here.  The full government test results are due out soon. LightSqaured is promising to release its mitigation solutions for the high precision instrument spectrum where interference is in fact an issue. Various members of the GPS community continue to raise concerns and are looking at their own data. There continues to even be questions about what is an appropriate level of interferecne that can be agreed upon as a threshold for concluding what constitutes "harm." The need to fill the FCC vacancies is lurking in the background along with whatever the SEC is up to.  And, of course there is the matter of the leak and where that trail leads.  

In the toxic political environment that is the U.S., how this one turns out is a mystery.  It certainly is not going to be without a lot of suspense. One can only hope that in the end, regardless of outcome, decisions are based on facts and not prejudiced by leaks and political grand-standing.  Tis the season to be jolly!

Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya, Alcatel-Lucent (News - Alert), Telcordia, HP, Siemens, Nortel, France Telecom, and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.