Billionaire Phil Falcone's LightSquared wireless venture took out full-page newspaper ads to defend its plans to fix interference its network may cause to global-positioning systems used by the U.S. military, automakers and others.
LightSquared, which has committed to building out a nationwide fourth-generation wireless network to offer wholesale service to other carriers, said the interference was caused by the "inappropriate use" of its air waves by other companies and it had found a solution for all but 0.5% of GPS users.
LightSquared has been buffeted by criticism from General Motors Co. (GM), Deere & Co. (DE) and others who say the plan to use spectrum originally set aside for satellites could drown out GPS signals. The company has vowed to use an alternate frequency and is testing filtering devices that it says could mitigate interference.
Last week, Republican presidential candidate and Minnesota Rep. Michele Bachmann accused the Obama administration of "crony capitalism" by allowing Falcone's company to continue to operate through a Federal Communications Commission waiver to use the satellite spectrum for a terrestrial network.
"We are making a $150 million private investment in the solution for GPS," LightSquared said in its ad. The company added that its filtering devices "can be implemented simply, quickly, and inexpensively into GPS devices."
The ad appeared in newspapers nationwide, including the New York Times and the Wall Street Journal, which, like this newswire, is owned by Dow Jones & Co.-parent News Corp. (NWS).
LightSquared needs FCC approval to operate its network under a previous commitment to cover 260 million Americans by the end of 2015, through the use of about 40,000 base stations. The company plans to compete with carriers such Verizon Wireless, AT&T Inc. (T) and Clearwire Corp. (CLWR) in selling wireless capacity, though it won't offer its service directly to consumers.
The company, which is backed by Falcone's Harbinger Capital Partners hedge fund, signed a 15-year contract with Sprint Nextel Corp. (S) to share construction costs as Sprint upgrades its network. LightSquared will pay Sprint $9 billion over 11 years to host its network signal and for other services.
LightSquared has signed deals with Best Buy Co. (BBY) and several websites, and today said it reached an agreement with AirTouch Communications Inc. (ATCH).
--Greg Bensinger 212-416-4676; firstname.lastname@example.org