Why the FCC halted LightSquared's wireless network plan

Federal officials have nixed a plan by broadband company LightSquared to build a national wireless network. Politico's Eliza Krigman explains why and discusses what happens next.

Kai Ryssdal: It's been a busy couple of days for the Federal Communications Commission. Not only were there the robocall rules, but the FCC has also announced that it's going to essentially kill what could have eventually been the start of a national wireless network -- known as LightSquared.

Eliza Krigman's been covering the whole thing for Politico. She joins us from Capitol Hill. Good to have you here.

Eliza Krigman: Thanks so much for having me.

Ryssdal: So I have to tell you, until this morning I had never heard of LightSquared. Tell us what that company is and what the whole plan was.

Krigman: Right, that's understandable. There's a lot of people who haven't heard about them. They are a broadband company and they earn satellite spectrum and they had a grand plan to launch a commercial network that could have been a competitor to Verizon and AT&T -- more traditional carriers -- by repurposing the satellite network for land-based transmissions that we need for cell phones, smartphone, the devices that we love to use.

Ryssdal: And it would have been Wi-Fi, right? This would have been a national Wi-Fi system?

Krigman: It would not have necessarily been Wi-Fi. It would have been a wholesale network. It would have been a new model for the wireless industry where if somebody wanted to, for instance, create their own e-book, instead of having to go through Verizon or AT&T, they could have purchased the airwaves needed to power that device on a wholesale basis for a lower cost from LightSquared had they been successful.

Ryssdal: Gotcha. And then it eventually rolls out to the consumer. But the FCC says no you can't do that. Why?

Krigman: Exactly. They have interference problems with GPS. Where they own airwaves is next to where GPS operates and they've been involved in a year-long battle with the GPS industry, with Congress. But ultimately the government is now unanimous in its position that there's no practical solution to the interference problem, so the FCC has proposed revoking the authority it would need to move forward with the commercial network and has set a prohibition on them operating -- period. So basically the conventional wisdom is it's game over.

Ryssdal: That's because obviously if you don't have the FCC's permission, you can't do things in the spectrum. But let me just ask a very basic question: Don't I have the ability on my smartphone -- even though, yes, it's not an iPhone -- can't I get Wi-Fi and GPS at the same time?

Krigman: It's not about whether Wi-Fi and GPS are compatible. It's about whether the specific network they were proposing on the airwaves they owned would interfere with GPS. That network never turned on. But the facts, at least according to the government, show that if they did, it would interrupt GPS signals.

Ryssdal: Got it. So can we now then take it to be that if LightSquared is doomed, what happens then for some cheaper, nationally-based, broadband -- conceivably convertible to Wi-Fi -- kind of system?

Krigman: That's a great question and the answer is unknown right now. But clearly it's a problem. Consumers, LightSquared would certainly say at least, have lost year because they were going to be offering a cheaper network. But the commission remains committed to moving forward with public policy changes that will make it easier for new entrants in the future to be able to accomplish such plans. But it's far from clear how long that will take and it's a bit discouraging for new entrant.

Ryssdal: Yeah. So eventually maybe, but not right now. Right?

Krigman: Exactly.

Ryssdal: Eliza Krigman, she's a technology reporter at Politico. Eliza, thanks a lot.

Krigman: Thank you so much.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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