updated 08:35 pm EST, Tue January 31, 2012
Sprint gives LightSquared short leash on GPS issue
Sprint in comments Tuesday revealed it had given LightSquared one more deadline extension for it to get FCC approval. The would-be 4G network had until mid-March to get clearance, a Sprint representative explained to Total Telecom. It had already been given an extension this month that had already run dry.
The offering would give LightSquared very little time to act. FCC officials have opened the floor to opinions on LightSquared's objections to what it sees as flawed and possibly rigged testing against GPS for interference. It has until February 27 for public comments and March 13 for responses. Short of a complete reversal of its position, the FCC likely wouldn't move quickly enough to avoid the extension running out again.
Losing Sprint's help would be costly and potentially fatal for LightSquared. It made a deal with Sprint to speed up its expansion and save money. Without it, LightSquared would need to spend another $13 billion in setting up its own cell towers and would move considerably more slowly.
Despite statements that it might close by spring without a cash injection, LightSquared has said it could still last through multiple quarters. Without this, though, it would need $3.5 billion to stay above water for the next two years and would have to hope that its parent hedge fund, Harbinger, would be willing to spend more.
LightSquared has been hoping it could be the infrastructure behind many other carriers' LTE-based 4G networks and has signed numerous deals in advance. If it shutters, it risks taking numerous startups or small companies down at the same time.