LightSquared

Overview
In early 2010, the mobile satellite service operator SkyTerrra Communications was acquired by the private equity group Harbinger Capital Partners. With FCC approval of the merger, Harbinger began construction of a nationwide fourth-generation wireless broadband network that will be integrated with satellite service, called LightSquared.17 The business model adopted for LightSquared is based on selling wholesale access to the network’s infrastructure. Projected customers include retailers, cable operators, device manufacturers, web players, contents providers, and telecommunications companies. Customers will have the choice of terrestrial-only, satellite-only, or integrated communications support.

An advantage for potential customers is the opportunity to move a new wireless product to market in a short time (once the network is in place). Advantages to LightSquared include costs savings by using only Internet-Protocol (IP) enabled Long Term Evolution (LTE) technology. Also, the wholesale customers of LightSquared will effectively be leasing a location from which to sell to individual customers, thereby assuming the cost of marketing, customers service, and billing and payment—all of which are expensive components of operating costs.

LightSquared, if successful, will be building a giant national mall in the "cloud," referring to the concept of remote services sometimes called cloud computing.18 The frequencies that LightSquared intends to use are adjacent to spectrum bands used for Global Positioning System (GPS) devices of many types, and by the U.S. Department of Defense. Potential interference on these frequencies is being addressed by the FCC but remains a major concern for Congress and has prompted a number of hearings.19