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Sprint gives LightSquared a 6-week ultimatum to fix its GPS issues

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January 31, 2012

Sprint said earlier today that it will allow LightSquared a 6-week delay to get its final approval to build its nationwide 4G LTE wireless network from the Federal Communications Commission, or it will terminate its agreement with the company.

The news come as no surprise, given the many GPS interference issues LightSquared has had with its wireless network for the past eleven months.

Over the past year, Wireless Industry News has extensively covered the events surrounding LightSquared's many GPS interference issues caused by its equipment. And you can read many of them here:

1) LightSquared admits its network places GPS navigation systems at risk

2) LightSquared is grilled by Congress over GPS interference issues

3) LightSquared says it has a solution to its GPS interference issues?

4) LightSquared steps up its offensive against the GPS industry

5) Sprint and LightSquared make a deal, share network spectrum

6) LightSquared has found another solution to its ill-designed network?

7) LightSquared becomes a MVNE, doesn't care about the interference it causes to GPS

8) Is FCC's Chairman Julius Genachowski in bed with LightSquared?

9) The GPS Coalition forces LightSquared to be on its best behavior

10) LightSquared in the news again, claims it has fixed GPS interference issues

11) LightSquared is rapidly running out of cash, files petition with the FCC

12) Did the FCC screw up when it licensed dual-mode communications next to GPS?

13) FCC opens up LightSquared's embattled wireless plans for public comment

14) Sprint gives LightSquared a 6-week ultimatum to fix its GPS problems

Those news stories will help you better comprehend the scope of the whole issue, and how critical it is to the public's overall safety.

A Sprint spokesman says that the company had given LightSquared until mid-March to resolve several concerns that its network greatly interferes with GPS receivers used in aircraft navigational systems and other such mission-critical applications.

Sprint had already given LightSquared a 30-day extension to get FCC approval at the end of December. A LightSquared representative confirmed that an extension had been granted. And he reiterated LightSquared's commitment to completing its network, however, more and more wireless industry analysts are now saying that LightSquared could fail and is rapidly running out of cash.

"Sprint and LightSquared have agreed to extend our network agreement through mid March," said Terry Neal, head of public relations for LightSquared. "Sprint continues to support our business plan to bring wireless broadband to more than 260 million Americans and our ongoing efforts to work with regulatory agencies to resolve interference concerns," added Neal.

Sprint had made the FCC's approval a strict condition of its 15-year deal with LightSquared when the deal was made last July. The two companies signed a contract at that time in which they agreed to share wireless spectrum, as well as network construction and equipment costs.

As part of the plan, Sprint would also use the LightSquared network for its new LTE-based 4G service. LightSquared, which is owned by the hedge fun Harbinger Capital Partners run by billionaire Philip Falcone, has cobbled together through various transactions enough wireless spectrum to build a nationwide wholesale broadband network.

The company's 4G LTE network is expected to reach 260 million people by 2016, the company claims. But LightSquared desparately needs the FCC's final approval before it can start deploying anything commercially. The GPS industry has asked the FCC not to approve LightSquared's request to use its wireless spectrum, because it says that the company's network will interfere with GPS devices that are already deployed.

The issue is not that LightSquared's signals bleed into adjacent wireless spectrum bands, where GPS devices reside, but rather the problem is that GPS receivers already in the field can "listen" to signals coming from another band, which is the exact same frequency that LightSquared operates in.

In turn, LightSquared has agreed to turn down some of the power on its signals, and it said that it will not use a portion of its spectrum, which is closest to the GPS bands. Additionally, LightSquared has also shown how filters used on GPS receivers can mitigate interference.

Nevertheless, the GPS industry strongly argues that these so-called temporary fixes are totally insufficient to eliminate all the many concerns. And in a recent test, it still showed significant interference issues. LightSquared accused the GPS industry of rigging the test to ensure LightSquared's failure.

Now, the FCC is accepting public comment until February 27 on LightSquared's argument that GPS device manufacturers aren't entitled to legal protection from interference caused by its signals. LightSquared said earlier this month it has enough money to operate for several more quarters. But the company has also said that it will need about $3.5 billion to be cash-flow positive in the next two years.

In other mobile news

Apple iPhone device assembler Foxconn is planning to build at least five additional factories in Brazil to help satisfy the huge demand in the iPhone and iPads tablets. The news was anticipated for a few weeks now.

Foxconn says an annual run rate of nearly 400 million units within five years is highly feasible.

The news was released publicly by Sao Paulo's Secretary of Planning and Development of the State, Julio Semeghini. He said the five factories, which are in addition to the one already believed to be turning out iPads and iPhones, will each staff about 1,000 workers each.

In addition to helping supply Apple with iPads and iPhones, the factories will be tooled for notebook and general electronics production for other companies as well.

Officials from Foxconn and the Brazilian government will reportedly meet following the Chinese New Year to decide on where the factories will be built, but Sao Paulo is said to be pushing heavily for the investment.

Overall, Foxconn already receives a few tax breaks for producing tablets in the region. Last week, the Brazilian government approved tax reductions or exemptions that cleared the way for the company to begin producing iPads in the country.

The new Inter-Ministerial Decree 34 specifically states that companies investing in the R&D of keyboardless touchscreen tablets weighing less than 750 grams qualify for IPI (Excise Tax), PIS (Social Contribution Tax) and COFINS (Federal Contribution Tax) incentives, something that triggered Foxconn to grow its investments in Brazil.

While all of this is happening, thousands of people reportedly lined the streets outside a labor agency located in the Chinese city of Zhengzhou last night hoping to land a job at one of Foxconn's local factories.

Foxconn is reportedly working with the city of Zhengzhou to double the size of the workforce at its facility there ahead of the next iPhone launch, recruiting an additional 100,000 employees.

Word of Foxconn's increased investment in Brazilian tablet production arrives on the heels of a report from market research firm NPD which predicts that the global tablet market will explode to 383.3 million units in 2017 as the portion of tablets purchased by customers in emerging markets increases.

In other mobile market news

Apple CEO Tim Cook said earlier this morning that he has hired John Browett to head up the company's global retail stores. Browett, who has presided over Dixon, a struggling U.K. consumer store chain since 2007, will step down from the board on Feb. 20 and leave at the end of April.

Two of the tasks awaiting Browett include leading Apple's consumer strategy and expanding the store footprint on a global basis.

Cook said today "Our retail stores are all about customer service, and John shares that commitment like no one else we've met." Browett is Cook's first high-profile hire since succeeding the late Steve Jobs as CEO.

Browett, described by Cook as having "incredible retail experience", said Dixons had made progress in "transforming the group", but added that the opportunity to join Apple "is an exciting one".

As well as drafting the turnaround strategy at Dixons to cut millions in operating costs, Browett pulled the chain out of parts of mainland Europe, redesigned ailing stores and reduced staff in most of them.

Browett tried to move Dixons from being a price-sensitive business to one that highlighted customer service and quality-- at least that was the plan, and then renovated all the stores to bring in new customers.

He then centralized warehousing, took repairs in-house to reduce waiting times, and overhauled staff remuneration.

Browett will supervise the expansion of Apple's 361-store global retail chain. In its last earnings statement, the company reported that its stores generated $6.1 billion in the December quarter, bringing in an average of $17 million per store.

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Finding and hiring Browett was a measure of how difficult it is to fill a position. It took Apple seven and a half months and the services of an international headhunting firm to find a new chief of retail.

In other mobile news

In the almost never-ending story of LightSquared's many GPS interference issues caused by its wireless network, the FCC says it has now opened part of the company's embattled wireless plans for public comment and review, in an effort to find out more of what the public thinks of LightSquared.

Friday, the FCC decided to accept comments on LightSquared's various claims that GPS receiver manufacturers were not entitled to interference protection from its signals as long as LightSquared operated within the FCC's parameters.

Overall, LightSquared has been fighting to get the FCC to allow it to move forward with its plans to deploy a hybrid satellite-terrestrial LTE network in spectrum near GPS bands, and that's just the issue, since LightSquared's network is located too close of the same frequencies used on today's GPS navigational systems aboard aircraft and other sensitive applications such as GPS landing assistance systems in bad weather.

LightSquared asked the FCC in December to "resolve the regulatory status" of GPS receivers. "Commercial GPS receivers are not licensed, do not operate under any service rules, and thus are not entitled to any interference protection whatsoever," LightSquared wrote in its December petition.

It argued that GPS manufacturers should be held liable for interference issues since they built the receivers which picked up signals from LightSquared's band even though they knew for years that a network was slated to be deployed there.

So far, the claim has been hotly contested by the GPS industry, and is now escalating even further. And LightSquared is running out of options, and the company is struggling, since it still can't kick off its LTE wireless network as long as the GPS interference issues are solved for good.

The FCC will accept comments and questions on LightSquared's proposal until Feb. 27, with follow-up statements due March 13. The six-week comment period could give LightSquared some much needed time to conduct more testing to prove that its service is compatible with GPS.

LightSquared is rumored to be running out of cash, and it is still unclear how much longer it can continue fighting to get the top clearance it so desperately needs for its network.

Right from the start, the FCC has always said it will not allow LightSquared to move forward with its plans until it fully resolves all problems related with GPS interference caused by its base stations and satellite dishes.

The ambitious proposal hit a wall after a series of government tests showed LightSquared's network knocked out GPS receivers, especially sensitive devices used to land planes, guide missiles and maneuver precision farm equipment.

LightSquared claims the results were biased and has asked the government to conduct new tests. Sprint recently put its spectrum hosting deal with LightSquared on hold until the company got the FCC's go-ahead.

Despite numerous setbacks, LightSquared continues to sign up customers for its network and now has agreements with more than 30 companies, including Leap Wireless International and even Best Buy.

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Source: Sprint Nextel.

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