Saturday, August 24, 2013

While LightSquared Lawsuit Remains Unresolved, So Does a Test of Spectrum Sharing

While the fate of bankrupt LightSquared remains unresolved for the moment, also unresolved is a spectrum sharing plan proposed by LightSquared that could give a boost to LightSquared plans to emerge from bankruptcy, but also would be important for any new owner of the asset.

Lenders holding some $1.4 billion in claims against bankrupt satellite-communications firm LightSquared have joined a lawsuit by by Philip Falcone, LightSquared CEO, who alleges that DISH Network is trying to secure LightSquared licenses to valuable radio frequencies at a discount.

The lawsuit involves a complicated set of financial transactions in which two entities controlled by Charlie Ergen, Dish Network chairman, are alleged to have acted in ways that favor either Ergen or Dish Network, in Dish Network’s effort to buy LightSquared.

In part, that is because an entity controlled by Ergen secretly bought enough LightSquared debt to become a “secured lender” to LightSquared, which means that since LightSquared is in bankruptcy, Ergen has the ability to influence decisions by LightSquared.

Aside from those issues, LightSquared still is hoping the Federal Communications Commission will act on a request by LightSquared to trade about 10 MHz of spectrum that causes interference with GPS devices, for access on a shared basis to 5 MHz of spectrum now used by the National Oceanic and Atmospheric Administration (NOAA).

That request is viewed by some observers as a key test of how well spectrum sharing between commercial and government entities actually can work.

If LightSquared is able to demonstrate that its proposed spectrum sharing does not cause problems for NOAA, other spectrum sharing efforts likely will get a boost. The National Telecommunications and Information Administration (NTIA) has created a program to evaluate such spectrum sharing concepts.

The federal government has called for releasing about 500 MHz of government spectrum for shared use by mobile and fixed wireless providers.

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