America's wireless broadband problem just got a lot worse

FCC veto of LightSquared's plans for massive wireless network may have also put the brakes on widespread 4G deployment

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It's very difficult to get to the bottom of the spectrum issue. What is clear, though, is that it will take an enormous amount of somebody's money to build out a wireless infrastructure capable enough to meet the explosion of demand. Although there are questions as to whether today's bandwidth availability is being artificially limited, there's no question that wireless demand is exploding and will continue to do so.

That need for wireless, and the feds' desire to have a new wireless competitor to keep AT&T, Verizon Wireless, and Sprint more honest, is why LightSquared's investors poured millions of dollars into the company after the FCC early last year gave it tentative approval to go ahead. Even if the FCC was right in blocking the LightSquared project (that's not altogether clear), investors will now think more than twice before backing another innovative or competitive wireless project. And there's already been some partisan political mudslinging in Washington, D.C., about the project, which helps no one.

What's more, the technical issues behind the rejection of the LightSquared application (which I'll explain in a bit) highlight the difficulty of expanding the fragile wireless infrastructure that we all use every day, no matter who builds it.

Does LightSquared threaten aviation and agriculture?
You can't see or smell or feel radiofrequency spectrum, but it is there. And it is not an unlimited resource. Radio and television signals use it up, as do Wi-Fi, garage door openers, cordless and cellular phones, and all sorts of communications networks we never notice. When there isn't enough in a particular range or signals are too close to each other, something isn't going to work. National governments have partitioned that spectrum into bands that are allocated for specific purposes, to prevent such interference.

That's exactly the issue that tripped up LightSquared. The hedge-fund-backed company had proposed building a wireless network big enough to serve millions of customers. Rather than push the service itself, it would have acted as a wholesaler, selling its capacity to carriers and other providers. LightSquared had already reached an agreement to work with Sprint to expand its 4G network. Sorry, Sprint. Look elsewhere.

The slice of spectrum LightSquared wants to use is right next to that used by GPS devices. There's been an argument about whether LightSquared's broadband network would interfere with GPS-based navigation equipment because of signal leakage. At one point, LightSquared agreed to scale back its plans to address those objections.

But this week, an arm of the Commerce Department said that scaling back won't work. "There is no practical way to mitigate the potential interference [with GPS devices] at this time," the agency said in a letter to FCC chairman Julius Genachowski, who had strongly backed LightSquared's application. The letter notes that the Federal Aviation Administration says LightSquared's technology would have interfered with GPS devices used for aircraft navigation.

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