LightSquared may pursue spectrum swap with Department of Defense

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Facing the stark reality that its 4G LTE network may never get off the ground, LightSquared may be looking to swap its spectrum holdings with the U.S. Department of Defense in a last ditch effort to gain approval from the Federal Communications Commission.

The report that LightSquared may pursue swapping spectrum with the Department of Defense comes from Dow Jones, which cites :sources familiar with the matter." LightSquared's current spectrum holdings were originally purposed for satellite communications, not a terrestrial network, and sit adjacent to the spectrum that is currently used for GPS services. As a result, the GPS industry has stated numerous times that LightSquared's network would interfere with its existing systems, and the FCC essentially sided with the GPS industry this week when it revealed that LightSquared's application for a 4G LTE network would likely be denied.

Swapping its spectrum holdings with the Department of Defense would give LightSquared spectrum that is further away from what is used for GPS purposes, lessening the impact of any interference.

A swap of spectrum licenses takes a considerable amount of time - something that LightSquared doesn't have at this point. Sprint has given LightSquared until the middle of March to gain regulatory approval for its network before it will back out of the agreement that was made between the two companies last year. Should LightSquared fail to get its network approved by then, the 15-year, multi-billion dollar deal would be scrapped and Sprint would be required to pay back to LightSquared the $65 million prepayment it received last year.