LightSquared Application Deserves Rulemaking Treatment, Says Wireless Companies

LightSquared filed with the International Bureau part of its business plans that it said would fulfill the mobile satellite services/ancillary terrestrial component dual-mode criteria -- requirements for handsets to communicate with terrestrial and satellite networks (CD Nov 29 p2). LightSquared, which plans to lease out its spectrum wholesale, said that though its retailer customers would have to pay for the both terrestrial and satellite spectrum use, they would have the choice not to offer a dual-mode phone. Opponents of the plan say it marks a major departure from the current MSS/ATC framework. “They are wrong on the process and wrong on the substance,” said Jeff Carlisle, LightSquared executive vice president for regulatory affairs, in interview. “But I'm glad to give [the commenters] something to do.” He said the MSS/ATC issue often stirs disagreement and one “can’t do anything on ATC without someone saying something about it.” LightSquared plans to file within a week a reply saying a full proceeding isn’t necessary for the change.

LightSquared’s modification proposal “has merit” but should be taken up in an open proceeding aimed at increasing terrestrial broadband use in MSS/ATC spectrum, CTIA said. Several filings on the MSS/ATC proposed rulemaking and notice of inquiry support loosening tests for using the band, making LightSquared’ request “directly relevant to the larger MSS proceeding,” the association said. Adding the request to the FCC’s MSS proceeding would give “all similarly situated entities” an opportunity to comment on the relief sought by LightSquared, CTIA said. Regardless of how the FCC handles the LightSquared application, it should first deal with worries over interference from terrestrial L-band services to GPS receivers used by public safety and commercial licensees for wireless networks, it said.

The argument that any retail offering of ATC-only service would fall outside the dual-mode requirement is unsupported by the FCC, said Verizon Wireless. The requirement was intended to ensure that the public receives the benefit of the MSS/ATC service, the company said. Basic secondary spectrum-market principles treat the rights of a lessee as “merely derivative” of the rights of the licensee, making any retailers subject to the same criteria as wholesalers, Verizon said. The carrier also said it doubts LightSquared’s statement that customers would be paying for satellite capacity whether or not they use it, given the small amount of satellite use sold with terrestrial spectrum use. LightSquared’s proposed sale of 500 kB of satellite use for each gigabyte of terrestrial use amounts to a 1:2000 ratio of satellite to terrestrial capacity, meaning “one cannot reasonably assert that wholesale customers” are really paying for satellite service, Verizon said. The proposed change has implications for MSS/ATC flexibility and could affect possible incentive auctions, as it would reduce the incentive to give back spectrum for use in an auction, said Verizon.

LightSquared’s wholesale provider plan is a “novel interpretation of the integrated service requirements” that marks a “departure in spirit and intent” from the FCC’s requirements, said AT&T. The commission has “repeatedly stressed” that ATC rules are meant to support a satellite-based service, AT&T said. The International Bureau’s issuance of a public notice on LightSquared’s request giving only 10 days for comment was “at best unorthodox” and may conflict with agency rules, the carrier said. The FCC should take up this issue by “expediting” the MSS proceeding, rather than creating a situation where the commission “must choose between causing potentially significant competitive harm to the MSS industry, or prejudging an important issue from the rulemaking on an insufficient record,” AT&T said. If it does decide to take up the request as is, LightSquared should be required to submit a formal waiver request, the opponent said. AT&T said the commission should also take up AT&T’s petition for reconsideration of Harbinger Capital Partner’s purchase of SkyTerra, which created LightSquared.

The FCC should provide MSS licensees with “substantial flexibility regarding the means by which such licensees demonstrate compliance with the MSS/ATC integration gating criterion,” said MSS/ATC licensee TerreStar. The company said it supports LightSquared’s application, and “under an appropriately flexible view” of the gating criteria, “LightSquared’s approach is simply one way of demonstrating integration that may not be applicable to other MSS/ATC licensees given their disparate business plans.” Open Range Communications offered its support for LightSquared, saying the application offers advantages for rural deployments. The FCC ruled in September that Globalstar could no longer lease its terrestrial spectrum to Open Range, because Globalstar hadn’t obeyed the ATC rules (CD Sept 16 p6).

However the FCC handles LightSquared’s application, it shouldn’t serve as a precedent in the Big Low Earth Orbit band, said Iridium. Any agency action on the application that would effect outside interests could impair business plans and the FCC’s allocation of satellite spectrum, Iridium said. The commission should take up the modification of ATC rules in a rulemaking proceeding where a “more open and equitable opportunity” exists for the FCC to examine arguments and enact rules, Iridium said.