Sprint pulls the plug on LightSquared tie-up; LTE firm tells FCC ‘we are not going away’

19 Mar 2012

Sprint Nextel has confirmed that it has officially terminated its multi-billion dollar network-sharing agreement with struggling open-access Long Term Evolution (LTE) venture LightSquared, after the controversial start-up failed to achieve the required regulatory approvals by the pre-existing 15 March deadline. Although Sprint had previously shown a willingness to push the deadline back, it was reluctant to make any more concessions, considering the numerous hurdles now facing the LTE start-up; last month LightSquared saw its plans overruled by the Federal Communications Commission (FCC), which declared that its use of non-traditional spectrum in the 1.4GHz and 1.6GHz bands interfered with GPS satellite navigation devices and aircraft flight safety equipment. Subsequent weeks have seen the stricken company beset with myriad financial and legal problems. Announcing its decision, Sprint issued the following statement: ‘Sprint has been and continues to be supportive of LightSquared’s business plans and appreciates the company’s efforts to find a resolution to the interference issues impacting its ability to offer service on the 1.6GHz spectrum. However, due to these unresolved issues, and subject to the provisions of the agreement, Sprint has elected to exercise its right to terminate the agreement announced last summer. We remain open to considering future spectrum hosting agreements with LightSquared, should they resolve these interference issues, as well as other interested spectrum holders’. As per the terms of the agreement, Sprint has returned USD65 million in pre-payments to LightSquared; the fees cover costs that were not ultimately incurred by Sprint.

In related news, in a press briefing held on Friday, Jeff Carlisle, LightSquared’s executive vice president for regulatory affairs and public policy, commented: ‘We are not going away’, before dismissing the FCC’s decision as ‘legally impermissible, arbitrary, and capricious’. According to Fierce Wireless, Carlisle said that, to the best of his knowledge, none of the 30+ wholesale agreements LightSquared has signed with various companies have been terminated. ‘When we move forward with a network it will be available to those customers whenever we’re able to do that. We hope they’ll hang with us as we resolve this issue’. Carlisle also said that LightSquared may revisit the idea of pursuing a network-sharing agreement with other wireless carriers in the future.