FCC blocks new cell phone

Last month my Subcommittee on Oversight and Investigations held a hearing on the LightSquared Network through the lens of Federal Communications Commission (FCC) process, which left a private company bankrupt and in regulatory limbo and 40 MHz of its spectrum holdings sitting fallow.

LightSquared began its efforts to build a national wireless broadband network in 2003, after the FCC issued an order permitting mobile satellite service providers located in the L-band to integrate an “Ancillary Terrestrial Component,” or land-based, cellular service.

Since that time, LightSquared and its predecessors have been involved in multiple proceedings before the FCC involving the development of its terrestrial component.  During these proceedings, LightSquared reached agreements with GPS companies to filter out all of its “Out Of Band Emissions” that may result from its terrestrial base stations and continued to move forward with its plans to develop its network.

Only after nine years of multiple public FCC proceedings and a multibillion-dollar investment by LightSquared did the GPS industry raise overload interference issues.  They reported their concerns in a proceeding that ultimately led to a conditional waiver for the company, putting its investments on holds until the interference issue could be resolved.

According to FCC documents, some GPS manufacturers were aware that their receivers would, as FCC’s Office of Engineering and Technology Chief, Julius Knapp testified, “effectively treat the GPS spectrum and the L-band spectrum as one band,” since 2001.  However, rather than incorporate better filters, the GPS industry continued to sell wide band receivers.  GPS manufacturers have claimed that was in large part due to a promise from the FCC that it would proactively protect GPS by providing it with a “quiet neighborhood.”

While my Subcommittee has not been able to confirm whether this promise was actually made, it is clear that such a commitment would run directly counter to the spectrum policy set by Congress.  In February, we passed important legislation that provided the FCC with the authority to conduct incentive auctions.  In this legislation we emphasized that in order to maximize the amount of spectrum brought to the market, we expected the FCC to craft the auction in a way that ensures minimal guard bands.  In a time when demand for wireless services and broadband is exploding and lawmakers are looking under every rock for new spectrum opportunities, we simply cannot afford a 40 MHz guard band.

Shortly after granting LightSquared’s conditional waiver, a Technical Working Group comprised of LightSquared, the GPS companies, and various federal agencies, was formed to examine the overload interference issues affecting GPS receivers.  The National Telecommunications and Information Administration (NTIA) later charged an interagency group, known as PNT ExCom, with validating the testing performed by the Technical Working Group. While the methodology of these tests has been disputed, ultimately NTIA concluded that LightSquared’s system would cause unacceptable interference to GPS.

Once receiving NTIA’s recommendation, I would have thought the FCC would have looked to find an alternative path for LightSquared, especially given the decade of authorizations and all the technical data submitted as a result of the FCC’s recommended Technical Working Group process.  Surely the FCC would be concerned about what these decisions or even the public notice itself might mean for future investors in spectrum.  However, only one day after receiving NTIA’s recommendation, the FCC moved to revoke its conditional approval of LightSquared’s plan to build a 4G wireless broadband network.

Fortunately, this is not the end of the story.  A week after the oversight hearing, LightSquared made a filing at the FCC mapping out a path forward.  First, LightSquared would vacate the upper 10 MHz of its spectrum holdings closest to GPS frequencies in exchange for 5 MHz located further away.  Second, LightSquared will forgo terrestrial deployment of its lower 10 MHz during the pendency of the FCC’s rulemaking to provide the agency time to develop operating parameters and revised rules for terrestrial use of the spectrum.

Despite the regulatory blow LightSquared received in February of this year, the company has continued to look for a path forward in building out its 4G LTE broadband network. Lawmakers from both sides of the aisle sent a clear message to the FCC that a workable solution for all parties must be in reach and should be found as quickly as possible.  Not only is a wireless broadband competitor’s business on the line, but also the regulatory certainty needed to encourage companies like LightSquared to invest in this space is now in serious question.  The FCC must rectify this situation, and it must do so through a transparent and timely process.