Inmarsat: LightSquared Has Defaulted On Payment

Mobile satellite services company Inmarsat said Monday that LightSquared has defaulted on a $56.25 million payment under their cooperative agreement related to LightSquared's so-far unsuccessful effort to launch a national wholesale mobile broadband network. LightSquared counters that the trigger for that payment has not yet been triggered.

LightSquared was dealt a major, if not fatal blow, last week when the FCC moved to rescind the waiver it granted the company, saying that there appeared to be no path forward without interference to GPS receivers. LightSquared disputes that, but it now has a series of deals related to the wireless broadband buildout and with potential users, but no wholesale network to offer.

"On 20 February 2012 Inmarsat issued a notice of default to LightSquared under the Cooperation Agreement. This notice triggers a period of 60 calendar days during which LightSquared can remedy the payment before Inmarsat is entitled to enforce its rights and remedies under the agreement for payment default, including pre-agreed spectrum arrangements and termination of certain LightSquared rights under the Cooperation Agreement," Inmarsat said in a statement.

The payment was due "upon the completion of "Phase 1 transition" which has now occurred," says Inmarsat.

LightSquared disagrees. "LightSquared has raised several matters that require resolution before the first phase comes to a close," said LightSquared in its own statement. "The terms of the agreement allow for additional time to resolve pending questions before phase one is complete and the final payment is due. LightSquared is committed to fulfilling its business plan to bring world-class wireless broadband connectivity to millions of Americans and believes that Inmarsat will remain an important partner in the company's future endeavors."

Inmarsat said they were in discussions with LightSquared about the payment, but could provide no assurances they would get the money.

The FCC granted LightSquared a conditional waiver to use its satellite spectrum for terrestrial broadband service--the FCC is looking to promote price and service competitiion as part of an effort to spur wireless broadband adoption--but the waiver was conditioned on revolving interference issues that remain unresolved, and the FCC and the National Telecommunications & Information Administration suggest, unresolveable in the near future.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.