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LightSquared’s 4G Plans Facing Dead Air

Congress further restricts launch in defense funding bill

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LightSquared disagrees. “While we are eager to continue to work with the FAA on addressing the one remaining issue regarding terrain avoidance systems, we profoundly disagree with the conclusions drawn with respect to general navigation devices,” LightSquared CEO Sanjiv Ahuja said in a statement. “The interference issues are not caused by LightSquared’s spectrum, but by GPS devices looking into spectrum that is licensed to LightSquared.”

LightSquared revealed Friday that it has retained another big Washington lobbyist to act on its behalf — Patton Boggs, the well-connected K Street power broker. The company has retained a total of 15 lobbyists to plead its case.

The company says it’s sitting on $14 billion in private investment that it will pour into job-creating infrastructure development once the FCC signs off on the network. Billionaire Phil Falcone sunk $3 billion into the service through his investment firm Harbinger Capital Partners, which launched LightSquared.

The company also has a major contract with Sprint Nextel (NYSE:S) to build and operate the network; and deals with Best Buy (NYSE:BBY), Airspan Networks (PINK:AIRO), Quantum Networks, EarthComm Solutions and others — all of which could lose if the network fails to launch.

Bottom Line: LightSquared investors and partners should brace for the biggest dead-air spectacle since Dan Rather walked off the set of CBS Evening News 24 years ago. The government won’t allow a wireless network that has the potential to crash planes and kill hundreds to enter service — even if it can wholesale wireless service at a mere $7 a gigabyte.

Airlines, aircraft manufacturers and avionics companies can’t — and won’t — abandon the integrated technologies they’ve been using for more than 15 years. And the FAA is not about to scrap its fuel-efficient, GPS-based NextGen system that is needed to handle increasing air traffic — and that currently is being tested by airlines like Southwest (NYSE:LUV) and JetBlue (NASDAQ:JBLU).

LightSquared’s one shot — and it’s a long shot at that — would be a spectrum swap of the L-band frequencies it acquired at auction years ago with an equal amount of spectrum in non-disruptive frequencies. LightSquared’s spectrum still is valuable — and usable — just not in the way it wants to use it.

As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned stocks.

Article printed from InvestorPlace Media,

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