updated 06:35 pm EST, Wed February 15, 2012
Will have to repay if FCC maintains work stoppage
Yesterday the US National Telecommunications and Information Administration (NTIA) advised the FCC that LighSquared's implementation of its LTE network "inavoidably" would interfere with GPS signals and recommended that the company not be allowed to continue with its deployment. The FCC then followed up by keeping in place a temporary stop to the wireless backbone provider's build out. A collateral consequence of the FCC's actions is that Sprint may have to repay $65 million back to Lightsquared that it received as part of its $9 billion deal with the beleaguered company.
Sprint closed the deal with LightSquared last July. Under the 15-year arrangement, LightSquared agreed to pay Sprint the $9 billion over 11 years for use of its wireless spectrum and network hardware. The $65 million was part of the initial payments to Sprint. If LightSquared doesn't manage to get the FCC's approval to resume its deployment by mid-March, then Sprint will be obligated to return the funds.
Sprint has already given two extensions to LightSquared in hopes that its deal would stay alive. [via Wall Street Journal (sub. required)]