A $10,000 gigabyte: Why we shouldn’t mourn for LightSquared

It has been two years since the FCC sent the bitter 2012 Valentine to broadband aspirant LightSquared (“Sorry Phil, but it could harm GPS”), all but dashing any hope the company may have had of proceeding with its plan. The almost-daily LightSquared news since has been dominated by bankruptcy proceedings, resignations, abandoned alliances, debt deals, financial chest thumping, and some rather obtuse lawsuits – but little if nothing at all about the relative merits of the original plan. Has the relevancy of the original plan been lost in the drama?

The relentless engines of LTE expansion and spectrum-crunch-defying innovation have plowed ahead while the LightSquared saga has stalled. The other day I overheard a comment prompted by the recent news that Dish was dropping its bid for LightSquared’s spectrum (for now). An acquaintance lamented the latest twist: “I guess we will never see rural broadband” (one of the promises offered by plan supporters). Was the plan really going to provide that? Not exactly.

Rural broadband or spectral alchemy?

What was the original plan again? Turn some spectrum of relatively low value, namely that reserved for satellite communications, to high-value terrestrial spectrum. The satellite spectrum in question, acquired by LightSquared through purchase of a flailing satellite communications business, did come with limited options for adding an Ancillary Terrestrial Component to serve places where satellite might not work too well (i.e. with limited sky view; urban canyons, mountainous, or heavily forested). The waiver granted by the FCC in January of 2011 would have allowed LightSquared to become a new telecom carrier, with a hybridization of services via both satellite and potentially tens of thousands of high-powered terrestrial wireless broadband towers. But the waiver was conditional upon addressing interference concerns of other spectrum users. If successful, this would have been an amazing tale of spectral alchemy, turning low-value satellite spectrum into a terrestrial gold windfall.

On February 14, 2012 the FCC indicated their lack of confidence in the actions by LightSquared to address the interference concerns, particularly with those related to satellite navigation systems. The ordered technical testing did not go well for LightSquared. Despite the devastating setbacks, they still have applications before the FCC to seek modifications of at least parts of the original plan, although an FCC court filing last month threw icy water on potential approvals.

But back in 2011, after the waiver was granted, LightSquared’s efforts were all about selling the original plan. The company paraded retired politicians (many hired as consultants) and even former FCC dignitaries to sales-pitch the media and lobby aggressively on Capitol Hill. The plan was painted as a panacea for a lackluster economy, and even a way to bring “economic security for rural America.”

But as telecom industry analyst Tim Farrar blogged “There’s no there there.” It was later revealed that even the rural home turfs of some of the plan’s strongest supporters would likely not have been served by the broadband component of the plan. The new service was to be a hybrid of terrestrial tower broadband and satcomm for areas where towers were not going to be profitable (i.e. many rural areas). And what would that satcomm service have looked like for rural areas?

The $10,000 Gigabyte

In a November 2010 document delivered to the FCC, LightSquared provided a glimpse. From footnote 8 (on page 8 of the document): “LightSquared estimates that the capacity of its fully deployed terrestrial network as being 2,800 terabytes per hour, while each SkyTerra satellite has a capacity of 100 gigabytes per hour.” Not much capacity for rural areas dreaming of booming businesses in the cloud. Pricing was addressed on the same page: “The company’s pricing is integrated charging $6 per one GB of terrestrial usage and providing 500kb of satellite usage as part of the integrated price, with a charge for satellite usage above these levels of $0.01/kb.” The $6 per Gigabyte for terrestrial is pretty amazing if that wholesale price could be preserved through retail, but then the satellite service price of a penny per kb equals $10 per Megabyte and $10,000 per Gigabyte. Ouch.

An irony of the “rural boost” stance is that rural agriculture is increasingly reliant on GPS for precision machine guidance. Indeed, doing no harm to GPS turned out to be one of the most compelling arguments against the plan. Boxing in GPS signals with all sorts of technological proposals and fixes (for which the hapless GPS users would have had to pay a hefty price) was pitched by some as the only hope for a broadband future for the U.S. The only? Two years later, LTE/4G seems to be doing quite well and competition is certainly heating up, confounding the “spectrum crisis” alarmists from a few years ago.

Throughout the saga, we were told that the US is somehow “falling behind the rest of the world in broadband.” One amazing thing about these other countries who are the object of our “spectrum envy” is that none of them has had to alter, compromise, burden, or otherwise harm satellite navigation or GPS to achieved their broadband goals. Were so many being asked to sacrifice so much for the sake of a plan widely viewed as flawed and outdated?

Gavin Schrock is a technology writer focusing on geospatial sciences, and an editor with Professional Surveyor Magazine.  You can find him on Twitter: @schrockg @xyHt