The FCC’s initial support may bode well for LightSquared’s success in the review process to come, but other agencies remain wild cards. “There are plenty of people in the right places for this to go forward, but they won’t without resolving the GPS issue,” Glenchur said. “As a practical matter, the FCC has to follow the lead of the other federal agencies.”
Ahuja said he remains optimistic that the FCC, sooner or later, will give LightSquared a thumbs-up. But many hurdles remain. Rethink Research Associates, a Britain-based consultancy that focuses on the wireless market, noted recently that the FCC “seems to be throwing cold water on such optimism.”
Beyond the wariness of federal Defense and Transportation officials, the FCC’s own enthusiasm may be fading. The agency called last month for more testing of LightSquared’s network. Tim Farrar, a telecommunications analyst at TMF Associates, a consulting and research firm in Menlo Park, Calif., has suggested that LightSquared’s plans may be on hold while the FCC makes up its mind. “What comes as a huge shock,” Farrar wrote, “is that the FCC has offered LightSquared absolutely nothing to indicate it is minded to approve LightSquared’s terrestrial operations in the future.”
Still, LightSquared has reason to hope. It has revised its proposal, promising—at least at first—to confine its spectrum use to the part farthest away from what GPS uses. The Coalition to Save Our GPS has become less strident in calling on the FCC to flat-out block LightSquared’s plans. And federal policymakers continue to regard broadband-for-all as a worthy objective. Telecom-industry analysts say that the political will to get LightSquared off the ground remains high.
“In spite of the political uncertainty, we continue to expect the FCC and LightSquared to find some way to allow the company to proceed,” investment analyst Townsend said. “Common sense still dictates to us that FCC cannot promote the longer-term needs for more spectrum and then kill off one of the solutions to that need.”
Yet the future of LightSquared, its broadband network, and the extent of competition in the wireless marketplace has moved beyond the realm of technological fixes and regulatory rulings. This highly technical, arcane face-off, already a target for Fox News and presidential hopeful Bachmann, could well become an issue in the 2012 campaign and in the ideological tug-of-war between the White House and the Republicans in Congress.
“It’s time Washington politicians stop using LightSquared as a piñata,” Ahuja declared.
This article appears in the Oct. 15, 2011, edition of National Journal.