LightSquared struggles to save network after leaked GPS report

LightSquared is fighting for the life of its proposed LTE network, as government test results emerging later this week question if there’s any possible way its 4G network can coexist with millions of commercial GPS devices. The report, which was leaked to Bloomberg on Friday, found LightSquared’s network would knock out the majority of general location GPS receivers if brought within 100 meters of a cell site. If the report’s findings stand, the Federal Communications Commission will have little choice but to void LightSquared’s plans for terrestrial network rollout, creating huge repercussions for partner Sprint(s S) as well as the 30 or so operators, ISPs and retail brands that have signed up to buy LightSquared 4G capacity.

LightSquared is trying to build a nationwide LTE network using satellite spectrum adjacent to the band GPS satellites use to transmit their location signals. The result has been a political and public maelstrom, pitting LightSquared on one side and GPS device makers, government agencies and any number of industries that depend heavily on satellite system’s location beams on the on the other. At issue is whether LightSquared’s high-powered LTE signals will overpower the much more sensitive GPS receiver embedded in vehicle nav systems, cellphones, airplanes, trucks, farm equipment and countless other devices.

LightSquared is livid about the National Space-Based Positioning, Navigation, and Timing Systems Engineering Forum’s report, which performed tests on 92 different types of GPS receivers, ranging from cheaper GPS handhelds to more sophisticated navigation devices, and found interference problems with 75 percent of them. In a letter dated Dec. 12 sent to the Forum (otherwise known as ExCom), LightSquared said the results of the report were purposely misinterpreted to paint LightSquared in a bad light. Furthermore, the letter stated, the testing didn’t take into account LightSquared’s latest plans to lower the transmission power of many of its towers: measures the would-be mobile operator claims would eliminate almost all of the interference problems ExCom identified.

At a press conference on Monday, LightSquared EVP of Ecosystem Development and Satellite Business Martin Harriman said ExCom tested at power levels 32 times to greater than the power at which the LTE network would operate (LightSquared announced its revised network configuration in September, after ExCom had begun its study). Based on LightSquared’s analysis, only 14 of the 92 different devices would have been affected, and those would see only imperceptible levels of interference, Harriman said. LightSquared and the government are using completely different thresholds to define interference, with the government raising red flags when it measures disruption levels six times lower than the level LightSquared has proposed. Harriman said the 1-decibel change ExCom is measuring is the lowest level at which a GPS receiver could even detect the presence of interference, but it by no means prevents them from functioning.

“It’s kind of like saying an extra foot of water in an 80-foot dam will cause that dam to fail,” Harriman said. He added that LightSquared believes once government testing takes LightSquared’s reduced power levels into account, it expects GPS receivers to skate through the tests with ease. Harriman also pointed out that none of the GPS-enabled mobile phones ExCom saw interference problems, even without taking reduced power levels into account.

But TMF Associates analyst Tim Farrar said he doubts ExCom’s conclusions would have been much different even if measured interference under LightSquared’s revised plan. Farrar pointed out LightSquared isn’t reducing transmission power at all cell sites, just at the low-slung towers in urban areas where devices are more likely to get close to a transmitter. In addition, LightSquared isn’t planning on maintaining those low “power-on-the-ground” levels indefinitely. LightSquared has stated it would gradually increase transmit power at those urban towers over the next five years, bringing them closer to the levels ExCom tested.

Even if LightSquared’s new network plans were to cut down that 75-percent failure rate considerably, any chance of failure would be unacceptable when it comes to the country’s commercial GPS system, Farrar said. Light aircraft use the types of general location receivers that ExCom tested, and even a small amount of interference could have a critical impact, Farrar said. The government is being conservative, Farrar said, but it has every right to be.

“Yes, we’re talking worst-case scenarios,” Farrar said. “If they reduced power levels further, that ‘worst case’ would occur less often, but is that enough when public safety is concerned?”

LightSquared wants more testing, but this latest setback will increase the already intense political pressure on the company and its principal investor Harbinger Capital Partners. If the FCC decides to deny LightSquared its network, the repercussions will be felt throughout the industry. Sprint has not only contracted with LightSquared to build its LTE network, but Sprint also plans to use half the network’s capacity to augment its own LTE service. A failed LightSquared would drive Sprint even further into the waiting arms of Clearwire(s clwr).

LightSquared has signed up 30 wholesale partners, all which would have to look elsewhere for mobile broadband network. That could benefit Clearwire, which is still clinging to the idea of expanding its wholesale business, and it could benefit Dish Network(s dish), which just picked up some choice satellite spectrum of its own. Unlike LightSquared, though, Dish’s L-band spectrum isn’t sitting smack in the middle of the GPS band.