We’ve seen it before. Whenever the FCC says no to companies that are about to invest millions, those that receive a No from regulators start crying they’ve been undermined. This time, LightSquared complaints the FCC violates its rights, after regulators have slammed the company’s plan for a LTE network.
LightSquared has been on and off the headlines for some weeks now. Ever since the company received its first No from regulators, it has continued to drag it on, hoping that in the end its plan will be approved.
Last month, the Federal Communications Commission (FCC) decided to dismiss LightSquared’s proposal to develop a LTE network using satellite spectrum and cellular network based on ground. Initially, the FCC had given their OK, but tests showed that the LightSquared technology was generating interferences with the GPS system used in transports, aviation and military.
On Friday, LightSquared tried one last strategy to get the FCC to reconsider their decision. The company’s statement reads: “If the FCC reverses its decision to permit LightSquared to move forward, it will be a bait and switch by the federal government of historic scale”.
Same day, Sprint Nextel Corp has officially withdrawn from the project, on firm grounds that the issue would only hurt the company from this point on. Sprint’s press release reads: “We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders”.
However, for LightSquared, Sprint’s withdrawn means it will receive $65 million as breakup fee. In fact, that’s one of the main reasons LightSquared urged the FCC to reconsider its plan. As their reply to Sprint’s decision reads, for LightSquared it “will enhance our working capital and provide more flexibility”.
Jeff Carlisle, executive vice president for regulatory affairs and public policy with LightSquared, argued that the FCC should reconsider its bid because there are significant factors involved.
“When you have a situation where significant investment was made on longstanding rules, you cannot then have a decision that is completely antithetical to that” he said. Carlisle added that the FCC should also take into account the law, the technology and the public policy when reassessing its latest decision.