New York - LightSquared, which hoped to offer national 4G LTE service on a wholesale basis, filed Chapter 11 here in a federal bankruptcy court, Bloomberg reported.
The carrier defaulted on debt to lenders after the Federal Communications Commission (FCC) found early this year that the company's spectrum, originally meant for satellite use, would interfere with GPS devices.
The voluntary Chapter 11 filing will give LightSquared "sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network," said Marc Montagner, interim co-COO and CFO. "All of our efforts are focused on concluding this process in an efficient and successful manner."
The FCC based its decision on a conclusion by the National Telecommunications and Information Administration (NTIA) "that there is no practical way to mitigate potential interference [with GPS devices] at this time."
LightSquared planned to repurpose satellite spectrum next to the GPS band to build a national terrestrial LTE cellular and offer service on a wholesale to companies that would resell the service under their own brands to end users. Companies that signed agreements with LightSquared included Best Buy, regional carrier Leap Wireless, and Net Talk. Sprint, which planned to build and operate the network for LightSquared, also talked up the potential to resell LightSquared service under its own name.
The NTIA, which coordinates spectrum uses for the military and other federal government entities, said in a letter to the FCC that "it is clear that LightSquared's proposed implementation plans, including operations in the lower 10MHz [farther from the GPS band] would impact both general/personal navigation and certified aviation GPS receivers." NTIA also contended that "there are no mitigation strategies that both solve the interference issues and provide LightSquared with an adequate commercial network deployment." (The text of the NTIA letter is here.)
In late 2010, the FCC granted a conditional waiver order that allowed LightSquared to begin commercial operation but only after harmful interference issues were resolved.
The company had planned in 2011 to build its network in four markets as part of a national rollout that would expand service to at least 100 million people by the end of 2012. By the end of 2013, the company had hoped to expand service to 145 million people, and by the end of 2015, make service be available to 92 percent of the U.S. population.