LightSquared: The next big wireless company you may never see

Wireless company LightSquared aims to be a spectrum wholesaler, and it could change the whole wireless game for the other four carriers.

Let's face it: We don't have a whole lot of options for wireless carriers right at the moment. You could sign up with Verizon, AT&T or Sprint. You could also sign up for T-Mobile and hope for the best. All those companies will provide fairly similar rate plans, especially the big red company and the big blue company.

Here's a name you might not have heard before: LightSquared. It's a wireless company, it has a big block of broadcast spectrum reserved and ready to go, and it's pretty different from the other companies I've mentioned. LightSquared aims to be a spectrum wholesaler. As Kevin Werbach of the Wharton School explains, "LightSquared wants to open up a very different model where they will provide capacity to anyone, whether it's another carrier or some sort of provider like Apple, or Amazon.com."

So instead of Verizon being your carrier, Apple could be your carrier. Or so it would appear. Of course, all this only happens if LightSquared gets approved by the Federal Communications Commission. That approval is hard to come by since tests of LightSquared's signal indicate it would interfere with GPS devices. Get people lost, put them in danger.

Those findings set up a big fight between LightSquared, the GPS industry and the government. LightSquared filed a motion with the FCC this week to be approved for operations, saying that if some GPS devices are, in a sense, overhearing the LightSquared signal, it's the devices fault and not LightSquared's. "Lightsquared is claiming that the test metrics and requirements or methodologies that these studies use are too rigid and the interference it causes would either be minimal or nonexistent," says Kevin Fitchard, who covers the company for GigaOm," and the GPS industry and many government agencies disagree with them entirely. It's becoming a he said she said situation, so regardless of who's right and who's wrong, I guess the decision the FCC has to make is can you allow this network to go up if that's the case."

LightSquared has some urgency to go live and start bringing in customer dollars. It said this week it could run out of money by the middle of next year. If it's able to launch, says Werbach, it could really transform the wireless market. Make it more competitive, give you more options. "So, I've got a wireless connection in my laptop," says Werbach, "I've got a mobile phone, I've got an iPad, some other people have devices like Kindles, and there'll be other sorts of devices that depend on these broadband wireless connections. So just focusing on the market as carrier 1 like AT&T and carrier 2 like Verizon Wireless, and different plans that you might have is really only a small part of the potential and where I think we need to go."

On our program, we often compare the big four wireless carriers to The Beatles (Verizon = Paul, AT&T = John, Sprint = George, T-Mobile = Ringo). But Werbach says LightSquared would change the model. "It's much more that Lightsquared would be the Rolling Stones," he says. "They're a different animal entirely in that they want to provide the wholesale capacity and because they would provide it on a neutral basis, there would be freedom for the companies that license that capacity. Some like Sprint might just use it for more capacity for their own traditional wireless services. But, some of them might do entirely different things with it that it doesn't make sense or not in the interests or it's just not worth the time and effort for an existing carrier that has an existing business model to go do."

Also in this program, we go low-tech. But when you can go lowttech and pick up Hall & Oates (1-719-26-OATES), that's a bargain. The new Callin' Oates hotline lets web-less users get four tracks for free (aside from long distance charges) from the famous duo. The line has been failing occasionally since its launch. Which just goes to show you: PEOPLE LOVE HALL & OATES.

About the author

John Moe is the host of Marketplace Tech Report, where he provides an insightful overview of the latest tech news.

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