Lightsquared

Here’s the best summary I have seen of politically connected hedge fund manager Phil Falcone’s attempt to turn cheap satellite spectrum into a valuable land-based cellphone franchise, incidentally side-swiping our GPS services in the process.

Enter Phil Faclone and Lightsquared. Lightsquared gets access to some satellite spectrum cheaply and then ploughs headlong into a loophole in spectrum laws. The loophole is this: satellite spectrum licenses allow the construction of ground-based booster stations to retransmit their signal and hence make it more useful. The example envisaged is say a remote town in Alaska needs a 6 foot dish to receive the signal (and hence say get high speed internet). Rather than have everyone in the town install a six foot dish they install a single dish and then retransmit the signal around the town – and that way everyone in the remote area can use the signal cheaply. Seems sensible enough.

But in the eyes of Falcone this gives him the right to use 40 thousand plus booster stations all they way across America so he can retransmit to everyone. Of course these booster stations will also be connected to ground-based fibre networks where appropriate. And so Falcone plans to build another US national cell phone network or at least to sell spectrum to the existing networks.

This is – to put it mildly – audacious. And there is little doubt that American consumers would benefit from more wireless spectrum capacity.

But also to put it mildly it is a massive lean on the American taxpayer. You see if the spectrum had been auctioned like traditional spectrum the taxpayer would have received billions of dollars – dollars that will might now flow to Lightsquared and Falcone. Rarely have I seen taxpayers give away larger gifts to corporates (and that includes the banks) but in this case they are giving the gift to one slightly compromised billionaire and his hedge-fund clients. It is really hard – nay impossible – to see any policy basis for that gift.

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Comments

  • Tyro  On February 7, 2012 at 1:46 pm

    I wasn’t really aware of the details behind Lightsquared’s implementation and how it has gotten to the present point. It’s an interesting problem to consider.

    I wonder if the Lightsquared boxes could be used as hard x,y,z locators (surveyed from known existing locations and verified against the GPS to provide “hard” locations which could be used to either bounce corrected GPS signals to the end users or act in the same fashion.

    This would of course be a requirement for Lightsquared to use the spectrum as it does appear to step on the existing GPS band. This implementation cost would offset the spectrum purchase disparity and could have the benefit of providing GPS data in locations which would normally have issues (dense urban areas, personal experience has shown downtown Chicago makes a GPS helpless when driving).

    This also meets the intent of providing “social” function as described in the article, even if it is secondary to the business which drives the installation of the booster stations.

    • reality  On February 7, 2012 at 2:07 pm

      Probably not. GPS location accuracy depends on a several things – first, an extremely accurate and precise time system – I was going to say clocks but it is really a complete system of which clocks are only a part – second, an unobstructed, line of sight, signal propagation path from satellite to receiver, and third, a 3D array where the receiver is far from coplanar with the satellite mesh so that altitude can be calculated. Ground based systems could, at great expense, provide the first but not the second – topography and obstructions prevent it – or third, because low-flying aircraft would be at the same height as the towers. GPS-based terminal procedures are carefully surveyed to ensure that an accurate GPS signal is available down to runway level. Precision approach GPS systems include calculation of GPS signal availability for a particular approach at any given time ( Receiver Autonomous Integrity Monitoring (RAIM)) so that if there is an issue the receiver will not allow the approach.

      Sure, you could locate a transmitter at the airport. That’s what we used to do, it is called an ILS (Instrument Landing System) and is expensive to buy and maintain.

      The FAA’s ADS-B initiative is aimed at replacing equally, if not more expensive, radars with GPS so that all aircraft will be able to provide their position and course on demand, allowing automated conflict resolution and direct routing from point of departure to destination at great savings in time and fuel.

      It would be a shame to give up these benefits to make Falcone rich.

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