US satellite/terrestrial start-up LightSquared has been hit with further uncertainty after preliminary tests of its spectrum found it interferes with a majority of agriculture and military GPS systems.
According to the National Executive Committee for…
US satellite/terrestrial start-up LightSquared has been hit with further uncertainty after preliminary tests of its spectrum found it interferes with a majority of agriculture and military GPS systems.
According to the National Executive Committee for Space-Based Positioning, Navigation, and Timing (PNT), a US government group representing nine Federal bodies including the Department of Defense, initial analysis did not identify significant interference with mobile phones.
“However, the testing did show that LightSquared signals caused harmful interference to the majority of other tested general purpose GPS receivers,” explained Anthony Russo, director of the National Coordination Office for the group, in a statement on 14 December.
Russo also pointed to separate analysis by the Federal Aviation Administration (FAA) that highlighted interference with a flight safety system designed to warn pilots of approaching terrain.
He added that the National Executive Committee for Space-Based PNT expects to submit its final analysis to regulator FCC over “the next several weeks”.
LightSquared is awaiting the all clear from the FCC before it can launch commercial services. In response to mitigation techniques put forward by the company earlier this year, the FCC in September called for more testing to ensure its technology does not cause “harmful interference”.
Sanjiv Ahuja, LightSquared’s CEO, said the venture was eager to work with the FAA to address the issue concerning terrain avoidance systems. He added that “we profoundly disagree” with the conclusions made by the authorities in relation to general navigation devices.
According to Ahuja, the testing confirmed that interference issues had not been caused by LightSquared’s spectrum, but rather by “GPS devices looking into spectrum that is licensed to LightSquared”.
He said: “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.”
The company has also strongly criticised the leak of a portion of the report earlier in the same week, and described the move as an attempt to misinform the public.
In a letter addressed to the deputy secretaries of the Departments of Defense and Transportation, Ahuja called for an investigation into the leak, saying his company had “suffered serious and substantial injury” as a result of it.
Delays caused by the testing of LightSquared’s technology could impact its strict deployment schedule. As part of conditions tied to the venture’s ATC licence, it must be capable of covering at least 100 million people in the US by 31 December 2012, at least 145 million people by the end of December the following year, and at least 260 million people by 31 December 2015.
The initial interference results could also impede the group’s ability to raise the US$3.5bn it needs over the next two years in order to be cash-flow positive.
JP Morgan and UBS have been acting as main lenders to LightSquared, which is backed by New-York hedge fund Harbinger Capital Partners.
Added pressure
However, in related news, certain executives at Harbinger have recently been served so-called Wells Notices from the Securities and Exchange Commission, indicating that they may be charged with violations of US securities laws.
According to an SEC filing, Wells Notices were received by executives including Philip Falcone, Harbinger’s CEO and chairman, and Omar Asali, the fund’s acting president. In an unusual move, Robin Roger, Harbinger’s chief lawyer and a member of its board, is also under the spotlight.
Harbinger stressed that the Wells Notices were not addressed to the company, or any of its subsidiaries. In the filing, it said that certain staff from the SEC are considering recommending that the Commission file civil injunctions over alleged “violations of the federal securities laws’ anti-fraud provisions in connection with matters previously disclosed and an additional matter regarding the circumstance and disclosure related to agreements with certain fund investors”.
Reports explain that one focus of the SEC probe is a US$100m-plus loan that Harbinger provided to Falcone in 2009 to pay taxes.
Harbinger was unable to elaborate on the possible investigation connected to certain fund investors before the press deadline.
But, in the SEC filing, the group stated that it and its affiliates were “disappointed that the [SEC] staff issued Wells Notices in these matters”. It added that if a full investigation was launched, they would “vigorously defend against it”.
