There is a Threat to the Global Positioning Sysytem (GPS) Industry

There is a threat to the Global Positioning System (GPS) industry, affecting both your car on the highway and the planes in the sky. And it’s going to happen in a year.

By Bob Plunkett

In January 2010, the FCC gave the green light to a Wall Street wise guy to build a massive super-high speed wireless network for smart phones and laptop computers. It seemed like a no-brainer.

LightSquared Inc. (named after Einstein’s theory on the ultimate speed of light) is now under construction combining two communications satellites and 40,000 antenna towers to cover 92% of the nation. So anyone can be in contact anywhere with 4G data speed. The adventure is headed by self-made billionaire Phil Falcone. It has financing from major hedge funds, Sprint/Nextel is offering to give it full use of its wireless network, all major cable providers are signing up to use it and consumers get low-cost competition with traditional cell providers Verizon and AT&T.

There’s only one problem: LightSquared is a radio interference threat to the global positioning system (GPS) industry, affecting both your car on the highway and the planes in the sky. And it’s going to happen in a year anyway.

LightSquared is coming because it faces a deadline. Under its FCC deal, it must start service in 2012, and complete the network in 2015. So while it isn’t something you can sign up for right now – it has no advertising, or kiosks at the mall – it has one satellite in space and another on the launching pad and if is starting on all those call towers. Only last week, the network doubled in size when Sprint offered to rent out all its existing cell towers (in a desperate move to stay alive in the face of the proposed merger of AT&T and T-Mobile.)

And therein lies the problem.

Since the wireless signal is distributed by satellite, the signal can lag a few fractions of a second as it travels up to the transponder and back down again. No user would stand for this because any lag in response would wipe out the idea of super high speed internet connections. So the company asked – and got – permission to build ground towers to supplement the satellite coverage. But the FCC gave them access to the electromagnetic spectrum right next to GPS signals. Hundreds of experts assured the government that all the signals would get along fine. But the GPS industry alleges that interference from LightSquared’s antennas will render nearby GPS devices useless. The National Association of Manufacturers tested and found that GPS signals would be “drowned out” within 4 miles of a LightSquared tower. For aircraft, the interference extends as high as 12 miles above a tower.

LightSquared argues that the GPS industry is largely to blame for any interference problems. In order to keep costs down, the industry cut corners and found they could make a cheaper GPS receiver if they didn’t insulate the signal reception.

As LightSquared roars along, the debate is heating up. Concern about LightSquared’s impact on GPS has spread to the departments of Defense and Transportation, which warned the FCC, “it is essential to protect our defense, transportation and economic utility.” The FCC has taken notice as have industry analysts. “If they can’t fix that, it’s a showstopper,” said Roger Entner, a telecom analyst at Recon Analytics. “Imagine if GPS for everyone in this country stops working. They simply have to work around that spectrum where GPS is.”

The FCC has ordered LightSquared and the GPS industry to work together on a study to determine exactly how the new network would affect Global Positioning System service. The group includes representatives of several wireless carriers, plus engineers from public-safety groups and the aerospace industry.

Right now, it appears that LightSquared is operating within its rights. LightSquared system will be tested this fall in Las Vegas, Phoenix, Baltimore and Denver. The feeling is that the demand for data services is overwhelming the voice-centric cellular industry. LightSquared could better satisfy the insatiable appetite for mobile data because its network is optimized for data rather than voice (although it will offer the digital voice calling technology pioneered by Vonage).

Despite all the potential advantages to consumers, LightSquared’s ability to sell wireless service wholesale to companies like Best Buy, Apple and WalMart, may be its most important feature. Companies are already being forced to partner with cellular companies in order to sell their Internet-connected phones, hand-held devices and computers. Meanwhile, entertainment companies are signing up to distribute video nationwide without need for any cables or wires. That for example, would take the cable out of cable TV.

In the end, all sides agree that a new wireless network is necessary for continued economic growth since corporations have a desperate need for more communications abilities. The only question is who will be willing to give in.

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