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LightSquared Announces Plan B For 4G LTE

LightSquared, whose plans for a wholesale 4G wireless satellite-delivered broadband network has drawn criticism as a potential interference threat to GPS devices, says it has modified its plan.

Conceding that early tests indicated that the 10 MHz block of spectrum it planned to use for its initial nationwide launch did pose that interference risk, the company said Monday it was going to plan B.

It will use an alternative block that it says "greatly reduces" that risk and is located further away from the GPS frequencies, and will not use the original block that cause so much outcry.

In addition, the company said that it will reduce its base station power by more than 50%, " which will provide additional protection to GPS."

"This is a solution which ensures that tens of millions of GPS users won't be affected by LightSquared's launch. At the same time, this plan offers a clear path for LightSquared to move forward with the launch of a nationwide wireless network that will introduce world class broadband service to rural and underserved areas which still find themselves on the wrong side of the digital divide,'' said Sanjiv Ahuja, LightSquared Chairman and CEO in a statement. 

Broadband deployment is a key action item for the FCC and the Obama administration.

Last week almost three dozen companies including Vonage, Cellular South and XO Communications, sent the FCC a letter in support of LightSquared's 4G initiative, citing LightSquared's open platform and 100% wholesale model. While they recognized potential interference problems, they advised FCC Chairman Julius Genachowski to leave room for a "win-win" solution that included LightSquared's "ecosystem of third party software, hardware, and applications providers who will collectively seek to transform not only the wireless industry, but also other industries such as health care, automotive, transportation, education, media, entertainment, and energy."

The FCC in January LightSquared a waiver to test the satellite broadband service, much to the chagrin of GPS proponents, and last week granted it a two-week extension to file a working group report on its progress.

The FCC conditioned the waiver, which allows the dual service to offer terrestrial-only devices as well, on working with the FCC, NTIA and other agencies to resolve a number of issues, including potential interference with GPS receivers.

Citing the interference the testing revealed, The Coalition to Save Our GPS, said delays would not change the findings of "devastating interference" and advised the FCC to "stop squandering resources and move on to spectrum that does not impact GPS."

Among those who have been concerned about the potential interference issues was the Department of Commerce. Back when the FCC issued the conditional waiver to allow LightSquared to use the satellite spectrum, NTIA head Lawrence Strickling said: ""We are pleased that the FCC has taken our recommendation and is requiring that the potential interference concerns be addressed before LightSquared begins offering commercial broadband service. We will continue to work in consultation with the FCC, government agencies, and industry to ensure that any harmful interference concerns are resolved."

FCC Chairman Julius Genachowski has been high on the idea of the wholesale broadband net since at least last summer. When the project was announced, he said it represented "more than $7 billion of new investment, with the potential to create more than 100,000 new private-sector jobs within five years. Today's announcement shows that FCC policies are helping grow the U.S. economy by catalyzing investment and job creation."

"In approving this transfer of control, we observed that if LightSquared successfully deploys its integrated satellite/terrestrial 4G network, it will be able to provide mobile broadband communications in areas where it is difficult or impossible to provide coverage by terrestrial base stations such as in remote or rural areas," the FCC said in approving the conditional waiver in January.

That would further the FCC's National Broadband Plan public interest goals, a point the FCC made in granting the approval and that LightSquared points out on its Web site.

LightSquared will combine satellite and terrestrial delivery to provide wholesale LTE broadband access to cable operators, device manufacturers, retailers and others.

The President has also been stumping for his National Wireless Plan--announced in the State of the Union speech, which calls for rolling out 4G wireless service to 98% of the population within five years. That works for LightSquared, which is targeting 2015 for its nationwide 4G service that will reach more than 90% of the country, says the company.

Private equity firm Harbinger Capital Management, which is headed by Philip Falcone, owns LightSquared.