GPS titan Deere & Company has agreed not to object to LightSquared’s plans to use satellite spectrum for terrestrial LTE services in the US, after reaching a compromise on airwaves. The pact ends years of litigation over interference concerns and could lead to similar agreements with other GPS specialists.
GPS titan Deere & Company (NYSE:DE) has agreed not to object to LightSquared’s plans to use satellite spectrum for terrestrial LTE services in the US, after reaching a compromise on airwaves. The pact ends years of litigation over interference concerns.
Having exited Chapter 11 bankruptcy, the newly formed ‘New LightSquared’ vowed to provide increased protections for the farming equipment maker’s interests.
It agreed to adhere to certain power levels on the L-band’s uplink and downlink frequencies, measures that will reduce out-of-band emissions, and to forgo terrestrial use of the downlink band closest to the GPS signal.
Specifically, Deere said it would not object to the venture’s network in the 1526-1536 MHz, 1627.5-1637.5 MHz, 1646.5-1656.5 MHz and 1670-1700 MHz bands, as long as the network deployment keeps to the agreed operational parameters.
Their agreement, which settled a lawsuit filed by Deere in November 2013, could lead to similar deals with other GPS specialists such as Trimble (NASDAQ:TRMB) and Garmin (NASDAQ:GRMN).
LightSquared CEO Doug Smith said the move creates a framework that “enables GPS and broadband to peacefully coexist”, adding that it will continue to search for a consensus with industry and the US government that will enable it to use its spectrum.
The venture has been in peace talks since the FCC banned it from launching commercial services due to concerns that its frequencies could interfere with GPS devices, helping push it into Chapter 11 protection in May 2012.
One of the options it has previously floated involves using government spectrum to compensate for not using some of its own airwaves.
LightSquared’s bankruptcy case was highly litigious but a turning point in the group’s battle with the GPS industry came in July, when it agreed to pause legal action with Trimble to seek a settlement.
According to the satellite/terrestrial venture, the break would free up the technical staff it needed to help resolve the spectrum interference concerns, as well as helping to cut litigation costs.
Exits bankruptcy
LightSquared emerged from bankruptcy after getting the FCC’s permission on Friday to transfer spectrum licenses to a newly restructured venture called ‘New LightSquared’.
That came after US Bankruptcy Judge Shelley Chapman approved the company’s reorganisation plan on 26 March 2015.
Incoming chairman Ivan Seidenberg, the former chair of US telecoms giant Verizon Communications, said: “We intend to do everything possible to achieve a reasonable business solution as well as an engineering consensus between wireless broadband and the GPS industry.
“We recognise that our number one job will be to resolve technical issues and liberate scarcely-used satellite spectrum that’s actually ideal for the cellular industry. I am confident we can reach a mutually-acceptable outcome that not only makes industry better off but also benefits consumers of wireless and GPS products.”
Helping to guide the venture through its regulatory issues will be Reed Hundt, who was chairman of the FCC between 1993 and 1997 and is joining the restructured firm as a board member.
Smith, the former COO of LightSquared who was elevated to CEO early on in the bankruptcy, said: “We are very appreciative for today’s FCC action which will allow LightSquared to begin anew and recommit to work with all stakeholders to resolve important technical matters, identify necessary solutions, and remove regulatory uncertainty that the company has faced over the past three and-a-half years.
“We will emerge from restructuring with new owners representing some of the world’s top investors, and they have committed significant new capital to give the company the runway it needs to grow and operate the business.”
The investors – Centerbridge Partners, Fortress Investment Group and JP Morgan – are sharing the ownership of the new company with hedge fund Harbinger Capital Partners, which used to own most of LightSquared’s equity but has been left with a 44% stake and no say in day-to-day operations.
During the bankruptcy, Harbinger head Philip Falcone had wrestled for control of the venture with Charlie Ergen, the CEO of US DTH giant Dish Network who became LightSquared’s largest creditor with more than US$1bn in debt.
Its restructuring plan, backed with a US$1.5bn exit financing facility arranged by Credit Suisse, Jefferies, and Morgan Stanley, will see Ergen’s debt repaid in full.
