Why You Should Regret LightSquared's Setbacks

from the competition-is-good dept

LightSquared is a new wireless carrier that has been trying to launch a wholesale 4G network across the USA. Funded by private equity firm Harbinger Capital, it sought to re-purpose satellite communication frequencies to build a nationwide cellular-satellite hybrid network, and then re-sell the network capacity to other brands. In January 2011, the FCC, eager to foster new competitors in the mobile space, gave LightSquared the green light to launch using their spectrum with one provision - that their network equipment NOT interfere with GPS signals and devices. Well, over a year has come and gone, and despite incredible effort and wrangling, the independent testing keeps indicating that LightSquared's terrestrial towers are not compatible with GPS device use. As such, the FCC has basically rescinded LightSquared's request to launch service on their 1.5GHz L-Band spectrum.

Note that, while LightSquared DID knock out GPS devices, it was not LightSquared that transmitted on the GPS frequencies, but rather the GPS devices that sloppily "listen" to the adjacent LightSquared frequencies. The GPS chipsets were generally cheaply made with inadequate filtering. That said, who is at fault is irrelevant: it remains LightSquared's problem to solve if they want to launch their network. A long history of spectrum policy states that new entrants must not mess up the existing radio devices.

What we've lost here is the chance to have a truly innovative wireless carrier which would have stimulated competition, energized the vendor community, and provided a white-label network for MVNOs. LightSquared had, in fact, signed up dozens of partners who would offer LTE wireless services as cellular companies, CE makers, and store brands like Best Buy, for example, who could sell connectivity in a bundle with laptops. Maisie Ramsay over at Wireless Week explains how a vast community of over 30 technology vendors have also lost a valuable path to market.

What strikes me, as someone who works with wireless carriers (LightSquared included), is that we may lose one of the scrappiest players out there. And markets thrive when a scrappy player stirs up the pot. Hutchison Whampoa stirred up the UK markets when it launched 3G in 2003, Free is currently doing the same in France. In the USA, we have regional players like Metro PCS, but nothing at the national level. My role at the Telecom Council of Silicon Valley is right where innovators meet with the telcos, and it was gratifying to see the tornado of new ideas, vendors, and possibilities that came about with a new network. Without legacy systems nor legacy thinking, lots of great ideas are free to emerge.

For now, with LightSquared's options dwindling, we may have to have to look elsewhere for new competition and open creativity. The WiFi space is fairly promising, as the spread of hotspots continues to soar, and new versions (802.11ac) promise greater range and throughput. Chipsets are cheap, and billions of WiFi devices have been produced. Republic Wireless exemplifies the possibilities of leveraging WiFi in mobile phones to the limit. Lots of people are hoping that the "white spaces" frequencies in between TV channels will be offered up to a WiFi variant, which will mean low-frequency spectrum that penetrates walls and buildings much better than today's WiFi. I like what the US carriers have done with the (globally) early launch of LTE, but there's no doubt that with increased competition we'd have a more dynamic market.

Filed Under: competition, gps, interference, spectrum, wifi, wireless
Companies: lightsquared

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  1. icon
    bbandeveywheuh (profile), 21 Feb 2012 @ 10:25am

    Moving on...

    LightSquared should be relegated to the bin labeled "FCC Mishaps" and the conversation should turn to what to do from here to ensure better and cheaper broadband.

    What needs to be looked at is what might be available by allowing broadcasters the right to broadcast using a different modulation scheme than ATSC and one that would fit seamlessly with today's wireless networks. A broadcast overlay would eliminate the video congestion present today and allow video congestion to be non-existent.

    And the real question is this; isn't it quicker, better, cheaper to allow deregulation to take the place of auctions, for auctions will surely be a long, drawn-out process. Deregulation allows broadcasters to experiment with different modulation schemes, schemes that can be designed to work seamlessly with existing wireless modulation. If the government wants to extract its pound of flesh, allow the following; 1) B'casters pay a 5% ancillary revenue fee (already in place) for anything beyond basic broadcasting, such as spectrum leasing to wireless carriers 2) allow for a one-time fee to be paid to the government when a station's spectrum usage rights are purchased by a wireless carrier, 3) maybe even increase ancillary revenue fee to 7-10% when spectrum is leased to a wireless carrier.

    A plan of this sort would enable spectrum availability for wireless carriers while still maintaining a free OTA TV service. If a wireless carrier came to me and said that it wanted to lease my excess spectrum I would jump at the opportunity; the wireless carrier gets its much-needed spectrum and I am able to subsidize my free OTA TV station while eliminating wireless data usage penalties...sounds like a winner to me.

    The problem though is one of architecture...Wireless as it is currently configured is a one-to-one delivery, as opposed to broadcasting which is a one-to-many delivery. A lot of the network congestion would go away if wireless carriers implemented a one-to-many overlay with their current architecture, which is what they could do today if so inclined and what they will surely do with auction spectrum. But why go through a protracted battle—broadcasters would be willing to work with wireless carriers on a broadcast overlay plan and have offered to do so repeatedly. Another thing is that ancillary revenues bring in many more billions over a twenty year period than a one time auction (auction proceeds remain nebulous, probably no more than $6B to the Treasury).

    You have to ask this; what happens after an auction and the wireless carriers don't have any more spectrum to go after? What they will do is become more efficient, which is what they could do today...people really need to start asking the right questions. Move beyond the failed LightSquared experiment and move on to more pressing needs, which is ubiquitous broadband at an affordable price.

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