In follow-up to last week's report that LightSquared (Reston, VA, USA), an upstart 4G wholesaler, may interfere with systems such as Defense Department communications, the company announced it has secured approval from the U.S. Federal Communications Commission to offer dual-mode or terrestrial-only devices.
Last year the Federal Communications Commission approved an application from LightSquared to build a high-speed wireless network that would offer both satellite and land-based service for wholesale clients. The Virginia-based company is seeking to alter the original plan by allowing its wholesale customers the option to offer terrestrial-only phones.
But in a January 12 letter, the U.S. National Telecommunications and Information Administration told the FCC that if it allows such services they may interfere with global satellite systems for navigation, aeronautical emergency communications systems and receivers used by Federal agencies.
A fully terrestrial service would require more land-based stations than a combined satellite and terrestrial system and increase the likelihood of communications interference, according to the letter signed by NTIA Administrator Lawrence Strickling.
LightSquared aims to build a wholesale wireless network on which it would rent capacity to service providers looking to sell high-speed wireless services to consumers.
Companies such as T-Mobile USA, a Deutsche Telekom unit, and MetroPCS Communications have said they may be interested in partnering with LightSquared if it gets its network up and running.
LightSquared is owned entirely by Harbinger Capital Partners (New York), the private hedge fund founded by noted manager Philip Falcone, who serves as Senior Managing Director. LightSquared itself is under the leadership of CEO Sanjiv Ahuja, formerly of Orange.
LightSquared would compete with another rival, Clearwire Corp, which has already partially built a wireless broadband network, but Clearwire also need more funding in order to complete its network.
Clearwire, which is majority owned by Sprint Nextel, is estimated to need another roughly $3 billion in funding. Some analysts say LightSquared may need another $6 billion funding on top of the $2 billion it has already raised.