Sprint is left scrambling for spectrum, inhibiting its long-term expansion, after the Federal Communications Commission rejected LightSquared’s broadband network plan.
The federal agency, which had earlier given LightSquared’s proposed network conditional approval, said the company’s plan would interfere with GPS receivers.
The FCC’s decision leaves Sprint without a network provider for its planned 4G LTE rollout. Last month, Sprint gave LightSquared a 30-day extension to push its proposal past regulators. Since that effort failed, the agreement between the two companies will likely fall apart.
Sprint, facing the same spectrum crunch as its rivals, now must look elsewhere for the bandwidth it needs to catch up with Verizon and AT&T in the 4G race. The carrier will likely lean on its agreement with Clearwire to meet immediate spectrum needs, but Clearwire isn’t expected to roll out LTE before 2013, hindering Sprint’s ability to compete for today’s fastest devices.
On a deeper level, the FCC’s ban of LightSquared’s network removes a potential solution to the overall spectrum strain faced by the wireless industry. LightSquared can’t use satellite-phone transmission networks to build out spectrum, and neither can any other company, at least until someone solves the issues surrounding GPS signals.
The FCC also potentially set back its own agenda with this decision. The agency aims to make more spectrum available for mobile devices, further competition in the wireless industry, and ensure fair pricing for consumers by allowing more carriers and broadband providers to innovate in the wireless market.
The regulatory decision leaves the mobile industry short a potential competitor and removes a viable option for spectrum gain, ultimately allowing Verizon and AT&T to stay dominant by hampering the competition.
The balance of power swings in favor of GPS companies with the FCC ruling, suggesting that the industry gained lobbying power through its use by powerful public safety industries, including the military and aviation, which spoke out against the LightSquared deal.
“GPS manufacturers have been selling devices that listen into frequencies outside of their assigned spectrum band, namely into LightSquared’s licensed band,” said Jeff Carlisle, LightSquared’s executive vice president for regulatory affairs and public policy, on the company’s blog this week. “The GPS industry has leveraged years of insider relationships and massive lobbying dollars to make sure that they don’t have to fix the problem they created.”
The FCC implied in its decision the GPS industry carries its own responsibility for helping untangle spectrum rights, suggesting GPS companies and ventures like LightSquared that hope to use satellite bandwidth must work out a deal on their own.
The FCC’s ban on LightSquared’s proposal leaves Sprint in particular, and the wireless industry as a whole, floundering for more spectrum, potentially hindering wireless industry growth and competition.