The company filed Chapter 11 bankruptcy yesterday in a U.S. Bankruptcy Court in Manhattan. As of February 29 of 2012, the company had $4.48 billion in assets and $2.29 billion in debt. As it became clear that the FCC was not going to approve the network, LightSquared started to lose backers and carriers. Despite bankruptcy, Falcone and the current management team will remain with the company according to a company spokesman.

LightSquared is still intent on launching the wireless 4G network. Falcone described bankruptcy filing as “necessary” to protect the company from creditors looking for a “quick profit.” The company was granted a second extension last week giving it an additional seven days to pay creditors. LightSquared’s Canadian and Bermudan affiliates also filed for bankruptcy.

[via Bloomberg]

Those fears have supposedly prompted a complex settlement that would give LightSquared’s board space to renegotiate financing but also minimize risk for lenders. Falcone would “eventually step down” from his position as director, and would no longer be permitted to serve as an officer of LightSquared; instead, an independent board would be brought in, on which Falcone could not sit.

Falcone, meanwhile, argues that his position on the board was never expected to be permanent. “I’ve only been on the board for two months and it was always supposed to be temporary,” he wrote in an email this weekend. ”The board and the company need telecom and industry veterans, not hedge-funds managers.”

Lenders are apparently worried that Falcone will push for Chapter 11 bankruptcy in an attempt to escape existing financing obligations. The hope is that the hedge-fund manager will agree to clauses that make LightSquared “bankruptcy-remote” and even to make him personally liable should it later emerge that he supported, encouraged or was the cause of bankruptcy. Another alternative is that a new member of the LightSquared board would be installed with the power to block any push for bankruptcy.

LightSquared planned to launch a rival LTE network and take on AT&T and Verizon, but objections were raised when the spectrum the company intended to use was discovered to conflict with the GPS system. The issue prompted the FCC to revoke its approval for the network.

This is great news for LightSquared as they gather their things and begin anew thinking of ways that they might save their business now that the FCC has essentially given them the big hand in the face. The rental fee LightSquared is asked to pay quarterly is $29.6 million USD, difficult for a company that’s not currently allowed to function or offer up data connectivity for sale. LightSquared has said they will use the extra time to once again focus on obtaining regulatory approval for its project as soon as possible.

Inmarsat had previously said they’d shut down LightSquared if they did not cooperate under their agreed terms, noting their payment being late under the first phase of their written agreement. LightSquared responded by noting that Inmarsat, in turn, did not fulfill all it’s agreements either. Inmarsat spokesman Chris McLaughlin noted the following on the subject:

“We complied with everything they asked us to do [including] alternating stripes of L-band spectrum.” – McLaughlin for Inmarsat

Since this disagreement, LightSquared did make an outstanding payment of $56.25 million. LightSquared now seeks to continue their deal hinging on their ability to get in good with the FCC or substantially change the way they run their connections to data. Have a peek at the timeline below to follow this story back to the beginning!

[via ComputerWorld]

It was determined that LightSquared posed serious interference with most GPS devices and things went downhill quickly. Falcone has now admitted that he is seriously considering filing for voluntary bankruptcy for the company. Falcone’s hedge fund Harbinger Capital Partners is the majority partner in LightSquared.

The company seems dead at this point after missing payments to creditors and having no obvious path forward. Falcone says bankruptcy gives the company time to find a way to address the GPS interference issues that have crippled it. He also says that even if he filed bankruptcy, investors wouldn’t necessarily lose everything invested in the company because the spectrum LightSquared holds is worth money.

[via Reuters]

The break-up is “in the best business interests of both companies” LightSquared says, claiming that the move “will enhance our working capital and provide more flexibility.” The cash is likely to hold the biggest appeal; analysts predicted earlier this year that the company only had sufficient funds for a few months of operations, and has already slashed its workforce to cut costs.

The CDMA carrier “appreciates [LightSquared's] efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6 GHz spectrum.” it said in a statement, “however, due to these unresolved issues, and subject to the provisions of the agreement … has elected to exercise its right to terminate the agreement announced last summer.”

Nonetheless, the door is left open should LightSquared’s rumored defense against the FCC’s decision prove successful. “We remain open to considering future spectrum hosting agreements with LightSquared,” the carrier says, “should they resolve these interference issues, as well as other interested spectrum holders.”

LightSquared recently retained a high-profile legal team to take on the FCC, expected to allege that the agency’s external testing was flawed and that regulatory precedences have not been observed.

The contract had been for a 15-year deal between the two companies, with LightSquared intending to use a US-wide LTE network to deliver mobile broadband. However, the FCC decided that the satellite technology LightSquared planned to implement would interfere with spectrum already used by GPS, and – deeming the stability of the global positioning system to be far more important – canceled the incipient carrier’s approval.

LightSquared has recently hired a high-profile legal team to take on the FCC, and according to sources will file a defense against the agency’s decision today. That argument – believed to run in the order of 150 pages – will supposedly question the validity of the spectrum testing, as well as chase a new angle on regulatory precedences.

Nonetheless, it’s unclear how long LightSquared can continue operations without a 4G network to sell, and the carrier has already been forced to slash its workforce. Analysts predicted earlier this year that the company had sufficient funding for a few more months, though LightSquared itself claims it could operate for “several quarters” more.

The company has hired two conservative litigators, Theodore Olson and Eugene Scalia, suggesting LightSquared is ready to take a legal battle to the FCC over its alleged “mishandling” of the LTE situation. Olson told Politico that the LightSquared situation was “an egregious example of the government encouraging a company to invest an enormous amount of money to meet a national objective and then pulling the rug out from under them capriciously and precipitously.”

He went on to say: “On the face of things, it looks to me like the government has acted arbitrarily after inducing the expenditure of an enormous number of resources.” When asked about a legal strategy, Olson declined to comment, but did say that when they “dig into things” that they may end up with “a whole lot stronger case than people thought”.

Theodore Olson and Eugene Scalia both have experience tackling the government in legal issues, which is why LightSquared have secured their services. Olson previously represented President Bush in the Bush v. Gore Supreme Court case. Scalia, meanwhile, has been a litigator for the Labor Department, and has represented Boeing when they were involved in a dispute with the National Labor Relations Board.

The company called the layoffs a “prudent and necessary” measure to save money. This week LightSquared missed a payment on a $56 million loan to a British company that operates satellites called in Inmarsat. Last week the FCC revoked permission granted LightSquared to move ahead with wireless network plans. The problem with LightSquared’s plan is that the FCC found the service interfered with a significant amount of GPS devices on the market today.

Philip Falcone is backing LightSquared with a huge chunk of the assets from the hedge fund he manages. Reuters reports that Falcone has invested more than 60% of the $4 billion in assets Harbinger Capital Partners owns. If LightSquared completely fails, things won’t be good for Falcone.

[via

“Typically, when America has faced a challenge, the private and public sectors join together to help solve these problems to better serve this country” LightSquared wrote in a statement. “Unfortunately, with its action yesterday, the FCC has harmed not only LightSquared, but also the American public by making it impossible to build out a system that would meet public policy goals of successive administrations.”

As the company sees it, the US government insisted that it build out a wireless broadband network back in 2010. “At the government’s mandate, LightSquared began investing billions of dollars in America’s infrastructure” it says, “without asking for any money from the American taxpayer.”

All that changed when the spectrum LightSquared has been intending to use was deemed to potentially interfere with GPS, something the FCC decided was too dangerous to risk. The company now faces the challenge of either finding a new revenue stream to tide it over as it attempts further legal action, or the vague possibility of swapping its spectrum with bands used by the Defense Department.

The new set of airwaves LightSquared is reportedly seeking to use are used by the Defense Department primarily for aircraft testing. While this would allow them to operate farther away from the GPS signals they’re now trying to avoid, one of those criticizing their usage of the first set of airwaves was non other than the Defense Department again. This swap is reportedly one of several options the company is considering.

The original plan was to have LightSquared operate satellite wireless airwaves (spectrum) for a land-based nationwide network for internet for 260 million Americans by the end of the year 2015. This plan would allow LightSquared to compete with AT&T and Verizon in the spectrum wholesale market, and the company had already signed agreements with Best Buy and Leap Wireless for future sales. DISH network is also working with the FCC to create satellite spectrum for a terrestrial wireless network and expects to get a ruling on it by the end of March.

[via WSJ]

Exactly how Harbinger will handle those repayments – or, indeed, try to leverage LightSquared’s value moving forward is unclear. With the FCC unlikely to be moved on its technical decision around GPS stability and the spectrum LightSquared hoped to use for LTE, the value of the frequencies has instantly ditched.

The company’s options, BTIG LLC analyst Walt Piecyk suggests, amount to selling the spectrum it holds for whatever it can make back, or attempting to swap it for more flexible spectrum, if the FCC will allow that. Alternatively it could sue the US government – perhaps a likely possibility given its aggressive assertions of malpractice by the FCC - and cut its costs to the bare minimum so as to try to eke things out until that process is complete.

Exactly how long that’s feasible is in doubt, however. Analysts suggested back in January that LightSquared only had sufficient finance for another six months of operations, while signed-up customers – who are yet to start actually paying the company – are already beginning to drift away. FreedomPop, for instance, now plans to use Clearwire’s network instead.

In calling the GPS industry too big to fail, the folks at LightSquared have noted that instead of improving their devices to avoid LightSquared’s frequencies, they’ve simply had the government outlaw LightSquared’s usage of the seemingly completely legally usable frequencies. Jeff Carlisle, LightSquared’s executive vice president for regulatory affairs and public policy, wrote the following on the matter:

“GPS manufacturers have been selling devices that listen into frequencies outside of their assigned spectrum band — namely into LightSquared’s licensed band. The GPS industry has leveraged years of insider relationships and massive lobbying dollars to make sure that they don’t have to fix the problem they created.” – Carlisle

Telecommiunications experts speaking with the NY Times have noted that interference between LightSquared’s signals and GPS signals is a tricky subject for the FCC because the interference itself appears not to be the fault of LightSquared’s at all. The GPS band on the electromagnetic spectrum is right next to the airwaves of satellite-telephone segments used by LightSquared, this making it quite easy for GPS devices to hear those extraneous transmissions. So instead of calling on GPS manufacturers to create devices that do not stray into nearby airwaves, the FCC is shutting down LightSquared’s use of the airways they should, if it weren’t for GPS, be able to use.

Because the GPS industry is too gigantic and a change on their part would be undeniably costly, the FCC is simply not allowing LightSquared to move forward. the commission will be sending out a request for public comment on Wednesday for the proposed action – so it’s not over yet!

[via NY Times]

Alternate words from LightSquared on the subject have included them pushing for additional testing and trying to get the FCC to say that GPS has no exclusive rights to the waves they use. This most recent statement from the group has us wondering how much time they’ve got left given how far they’ve gotten thus far. As LightSquared Executive VP Jeffrey Carlisle says:

“The testing just doesn’t reflect reality — and it was probably never intended to. [Recent testing] was rigged by manufacturers of GPS receivers and government end users to produce bogus results. We’ll continue to look at alternatives … assuming this goes past the end of January.” – Carlisle

The folks on the GPS side of things have another opinion, that LightSquared is attempting to attack the testers because they do not like the test results. This would certainly seem to be correct save for the idea that maybe, just maybe, GPS doesn’t hold the exclusive rights to the waves (reserved mainly for faint emissions from satellites), and LightSquared has full rights to argue. As Jim Kirkland, general counsel to GPS maker Trimble Navigation Ltd, notes,

“LightSquared does not like the test results, so it is attacking the testers. Test after test has shown that LightSquared’s ill-conceived plans do in fact cause widespread interference with GPS.” – Kirkland

It appears that GPS might come out on top of this one, by the looks of it, and LightSquared’s position will turn into a move over or get out sort of situation. Will the group be able to convert their technology to turn over a new leaf, or is this the end for LightSquared? We’ll see in a few weeks, at the latest!

[via Business Week]

The initial plans for the wireless broadband service were shot down due to interference with many GPS devices on the market right now. LightSquared came back with an alternative plan with a lower powered service that it said would not interfere as badly. Even those plans are being frowned on by the FCC, and it appears that LightSquared may be dead before it starts.

A letter from the FAA has been published that used tests by a panel of nine experts in different government agencies and departments. The conclusion was that LightSquared posed a risk of dangerous interference with GPS devices. LightSquared has argued in the past that GPS has no right to protection and that the GPS makers had poorly designed devices. The insinuation by LightSquared was that it’s not its wireless service but shoddy GPS designs that allow interference.

One of the big issues for LightSquared is that without FCC approval, its critical 15-year plan with Sprint for sharing 4G spectrum and equipment is void. Sprint has offered LightSquared a bone with an extension to the deadline for approvals. Sprint has granted LightSquared another 30 days to land the FCC nod.

The original deadline was December 31. The deal with Sprint is critical to LightSquared since it will save LightSquared $13 billion through the end of the decade. LightSquared has a bunch of deals in place already to sell service to retailers like Best buy and Leap Wireless. Not getting approvals for its tech would kill the company before it starts.

[via WSJ]

LightSquared here is noting that they’ve done no wrong because the problem is caused, first of all, by GPS receivers looking into its fully licensed spectrum. What they’re saying with this then is that even if the interference exists, these GPS representatives have no rights that would stop LightSquared from continuing on with business as usual. In fact, if what LightSquared executive vice president for regulatory affairs and public policy Jeff Carlisle says is true, the GPS industry agreed to their plans years ago:

“LightSquared has had FCC authorization to build its network for over eight years and that authorization was endorsed by the GPS industry.” – Carlisle

What LightSquared’s CEO Sanjiv Ahuja says is especially pointed in this regard as well:

“This petition goes to the very heart of the FCC’s mission, which is to ensure that the nation’s airwaves are governed by regulatory certainty.” – Ahuja

You can read the petition for declaratory ruling in a PDF file hosted by LightSquared and note the massive nature of the soft threat. When you tell a group like LightSquared that they can’t go through with a plan they’ve had on the books for 6+ years because some punk GPS jockeys have an issue with you, it’s time for business.

All that make sense to you so far, all that make it alright to have disrupted the GPS of poor defenseless little navigation machines across the nation? It’s not quite so simple as that, folks, and as Ahuja notes, the team at LightSquared has been working to fix the problem which, as you’ll see him say, isn’t of their making in the first place. In other words: LightSquared didn’t do it! Have a peek at this paragraph written up by Ahuja himself:

“The testing further confirmed that the interference issues are not caused by LightSquared’s spectrum, but by GPS devices looking into spectrum that is licensed to LightSquared. We have taken extraordinary measures — and at extraordinary expense — to solve a problem that is not of our making. We continue to believe that LightSquared and GPS can co-exist. And we will continue to work with the federal government on a solution that will allow us to begin investing $14 billion in private money into the infrastructure of America to create jobs, competition and increased access to technology to the nation.” – Ahuja

The issues brought up in the case earlier were regarding a terrain avoidance system, they say, and as they “profoundly disagree with the conclusions drawn with respect to general navigation devices,” so too do they say we should just forget about it. We’ll see how this continues to play out and if the FAA will enjoy this message as they work with LightSquared to fix up any future abnormalities.

According to testing that was conducted on October 31 to November 4 of this year, Lightsquared does cause significant interference with GPS devices. The study was conducted by the US government and determined that millions of GPS units in the field are not compatible with the LightSquared reports Bloomberg News.

The study draft Bloomberg saw noted LightSquared signals caused interference to the majority of GPS receivers tested. LightSquared was hoped to be an answer to providing wireless internet access to rural areas. To help reduce the issues with interference LightSquared is proposing a lower power level that would only affect about 10% of GPS devices out there according to the company. LightSquared and Sharp teamed up in October to develop tablets.

[via Business Week]

However, there’ll also be multi-mode CDMA/WiMAX/LTE mobile hotspots on offer, giving mobile data users an option to get online with WiMAX initially and then transition to LTE later, rather than see their modem instantly outdated after Sprint’s agreement with Clearwire expires at the end of next year. Manufacturers HTC and Motorola have already confirmed that they will be providing phones for the new LTE network, though given they’re two of the bigger names that we already associate with LTE devices that comes as little surprise.

Meanwhile Sprint’s Android phones will come with the option to download a new push-to-talk (PTT) app. The carrier hopes to shift people away from iDEN so that it can use the frequency band for further LTE deployment, as well as looking to a deal with LightSquared for coverage in 2015.

The news will come as some frustration to long-time LTE deployment watchers, with the introduction of yet another band used for the 4G technology. Currently AT&T, Verizon, MetroPCS and LightSquared all use different frequencies for their LTE networks, and Sprint will introduce a fifth. In addition to 1900MHz, Sprint will use 800MHz by shifting iDEN users off the frequency by mid-2013 and, eventually, 1600MHz in partnership with LightSquared come 2015.

Meanwhile, Sprint plans to launch a “WiFi offloading technology” sometime this quarter, though details of the system are yet to be revealed. However, it’s presumably a way to shift data use off the mobile network and onto WiFi, likely a preventative measure ahead of the arrival of the iPhone 4S

The news confirms reports late last month regarding Sprint’s LTE ambitions, though it’s unclear whether the carrier does, as those leaks suggested, already have test networks installed and operational. It will need to settle the thorny matter of FCC approval before it can use LightSquared’s system, however.

Sharp is the first maker of devices that LightSquared has chosen to launch a strategic collaboration with. The goal of the agreement is to produce a range of product solutions that take advantage of Sharp hardware like advanced LCD panels and camera modules. The devices will be co-developed and then offered to the LightSquared customers for their networks.

LightSquared will be showing off some of its devices at CTIA Enterprise and Applications conference on October 11-13 in San Diego. The LightSquared 4G network uses LTE technology. I would expect the service offered by LightSpeed to find its way into the offerings of some of the smaller carriers around the country.

[via LightSquared]

The carrier is now making good on that promise and apparently, LTE hardware is already installed in some areas ready for the networks to go live. Sprint is also field-testing that network gear already. A source told CNET that Sprint is hoping to launch the LTE service by late Q1 2012 or early Q2. The official 4G announcement from Sprint is expected next week at a Sprint event.

The move to WiMax and LTE will allow Sprint to make deals with more suppliers for hardware. The company is using FD-LTE hardware, which is the same as Verizon and LightSquared. This is all part of Sprint’s Network Vision plan to place 3G and 4G hardware together to boost voice data and push to talk services. Sprint will be using the D-block spectrum it acquired from the Nextel purchase. The carrier will also use the spectrum it has tied to 2G iDEN on Nextel when that network is finally closed down. Sprint has said in the past that it would continue to serve existing WiMax customers.

[via CNET]