LightSquared Asks for More Tests After U.S. Cites GPS Disruption

Philip Falcone’s LightSquared Inc. called for more tests of its proposed wireless service after U.S. officials said interference with the global-positioning system precludes quick approval of the venture.

No further testing is warranted after findings that LightSquared disrupts many GPS receivers, the National Executive Committee for Space-Based Positioning, Navigation & Timing said yesterday in a letter to the U.S. Commerce Department. The inter-agency body advises the government on GPS technology.

The government testing is “unfair and shrouded from the public eye,” Terry Neal, a LightSquared spokesman, said in an e-mailed statement yesterday.

The findings are a setback to LightSquared, which may have “a couple of quarters at most” before running out of money, Jonathan Atkin, a San Francisco-based analyst with RBC Capital Markets, said in an interview yesterday.

“The days are limited here,” Atkin said. “They would need to get more financing and it’s not clear that is really forthcoming from any source.”

U.S. regulators won’t approve LightSquared for commercial service if they find it would significantly disrupt GPS devices. The Reston, Virginia-based company plans high-speed wireless service to as many as 260 million people.

The U.S. Federal Communications Commission granted partial approval to LightSquared in January 2011, and ordered tests.

‘Harmful Interference’

Federal agencies unanimously found that LightSquared “would cause harmful interference to many GPS receivers,” Ashton Carter, deputy secretary of defense and John Porcari, deputy secretary of transportation, said in yesterday’s letter. That conclusion applies both to LightSquared’s original plan, and to modifications the company pledged after earlier tests showed interference, Carter and Porcari said.

“There appear to be no practical solutions or mitigations that would permit the LightSquared broadband service, as proposed, to operate in the next few months or years without significantly interfering with GPS,” Porcari and Carter said.

The letter was sent to Lawrence Strickling, head of the National Telecommunications and Information Administration, a unit of the Commerce Department that’s coordinating the U.S. review.

The information will be used as the NTIA makes its recommendation to the FCC, which is to decide whether to approve LightSquared, Moira Vahey, a spokeswoman for the telecommunications administration, said in an e-mail.

Air Safety

GPS makers say LightSquared inappropriately plans to send powerful data signals on airwaves previously reserved mainly for faint emissions from satellites. They say LightSquared would disrupt navigation equipment in aircraft, boats, tractors and automobiles.

LightSquared has said GPS makers should have planned to accommodate the company’s use of airwaves near those used by GPS devices. The company proposed operating at lower power levels after earlier tests showed interference.

Preliminary test results released last month showed that LightSquared disrupts an air-safety system that helps airliners avoid crashing into mountains and buildings.

LightSquared wants a new round of tests run by the FCC and NTIA, Neal said.

Members of an advisory board have “deep ties” to GPS makers, and the government chose to test “obsolete and off- market GPS receivers that nearly guaranteed failure,” Neal said.

Sprint Agreement

Navigation-gear makers and users welcomed the U.S. officials’ statement, Dale Leibach, a spokesman for the Coalition to Save Our GPS, a group formed to oppose LightSquared, said in an e-mail.

“Every set of independent technical studies has confirmed that LightSquared’s proposed operations would create widespread interference to critical GPS uses,” Leibach said.

Sprint Nextel Corp. (S) on Jan. 5 put a network-sharing partnership with LightSquared on hold as the companies await U.S. clearance. A day earlier, Falcone joined FCC officials in a meeting where LightSquared participants emphasized rules that call for LightSquared to offer service to at least 100 million people this year.

LightSquared is backed by $3 billion from Falcone’s Harbinger Capital Partners hedge fund. LightSquared may need more money by April, Jonathan Chaplin, an analyst with Credit Suisse Group AG, said last month.

LightSquared Chief Executive Officer Sanjiv Ahuja in a Dec. 9 interview said the company would be be adequately funded through the government’s review period.

“We’ll have capital beyond when we expect FCC clearance to happen,” Ahuja said. “That should be the early part of next year.”

Tammy Sun, an FCC spokeswoman, didn’t immediately respond to an e-mail and telephone call.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net

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