Lost in Space…No Really…

Lost in (Techno) Space
Wireless bandwidth is a limited commodity. Period. As increasing numbers of us acquire and use more wireless devices that are increasingly sophisticated and which use increasing amounts of bandwidth, the amount of unclaimed bandwidth decreases, leaving not only consumers, but first responders, air traffic controllers and government entities among others, with limited options. As an example, video and gaming are much bigger spectrum hogs than e-mail or text messages (without attachments). Certainly, there have been a number of moves to free up segments of the spectrum (including, most notably, the transition away from over-the-air television occurring two years ago), but the fact remains that there is a finite amount of spectrum, and the demand for it is increasing at a pace that would impress Danica Patrick.

Since Hurricane Katrina (2005!!), there have been repeated calls for a nationwide emergency wireless network so that first responders from different segments of government could readily communicate with one another in the event of another such natural disaster. Politicians at all levels of government are quick to jump on this bandwagon, but when any of them scratch below the surface - after all, who would be opposed to such a move? – none of the following groups have come forward to take the lead on it: the National Telecommunications and Information Administration (NTIA), FCC, DHS, FEMA, or DoD. Until this thorny issue can be resolved, all of those who sound committed to taking on this seemingly simple task (which is anything but) will meet with limited, if any, success. There are two problems with the nationwide network:

1. Which agency or agencies will design, manage and maintain it
2. From where will the spectrum come?

Also, assuming that additional spectrum can be found, who will get it? Will it be awarded to commercial carriers who can get it to market quickly and generate revenue for companies and subsequently shareholders? Or should it be reserved for first responders or the DoD in the event that they can get their collective acts together to build the aforementioned nationwide network? While these discussions (and much posturing) persist in academic and governmental forums throughout the country, the demand for bandwidth continues to increase at an exponential pace.

Space: The Final Frontier!
Enter a well-funded company called LightSquared of Reston, VA. LightSquared, which is backed by billionaire Philip Falcone and hedge fund Harbinger Capital, is working to enter the wholesale wireless market with a new twist…it’s going to direct its traffic skyward. First, because it can offload at least some traffic from the soon to be overburdened terrestrial network for at least part of the communications path, and secondly, because it can offer services in difficult to reach areas. Because no wires are necessary, signals can simply be sent skyward, received by the satellite and transmitted to where they’re intended.

LightSquared intends to base its network on 4G-LTE (in English, that’s the fourth generation of cellular wireless standards’ Long Term Evolution – not quite ready for prime time 4G). Its work to overcome regulatory hurdles has been successful, perhaps as a result of the technologies that it has chosen. In fact, in September, 2010, LightSquared created a partnership with the Indian Health Service, the lead agency for managing the health care needs of both Native American and Native Alaskan populations. Both of these groups of individuals are historically underserved, often because of the difficulty of reaching them through traditional communications technologies. Under the new program, LightSquared has agreed to donate satellite phones and service for use in targeted Native American/Native Alaskan communities. All satellite phones will come with service provided free of charge through 2020. Necessity, it is said, is the mother of invention. But I digress. And, while I know nothing about LightSquared’s maneuvers through the FCC for approval to sell its services in the wholesale market, the fact that its services can support an underserved population surely didn’t hurt.

In January, 2011, LightSquared received a waiver from the FCC allowing it to provide wireless broadband access without having to directly sell satellite service (not something that the FCC has previously permitted). Since securing this waiver, LightSquared has shared plans to essentially create new capacity in the spectrum-strapped system by directing communications to Inmarsat facilities in space and then bouncing them back to earth. While operators of GPS, as well as some federal agencies, are concerned that such use of satellite transmission could effectively cause significant interference, no formal action (other than what might euphemistically be called “official grumbling”) has reached anyone who could interfere (pun intended) with LightSquared’s plans. However, legitimate concerns do exist about interference created by LightSquared’s products with existing uses in aeronautics, surveillance and other non-commercial but government-directed communications.

There are inherent challenges when commercial interests are in conflict with governmental interests. Rather than turn this into a political issue, LightSquared’s lead reflects the company’s willingness to solve a problem by marrying existing technologies, working with regulators, and likely providing a decent return to shareholders. Luck has been a factor as well. The bottom line remains that this innovation on both the technological and regulatory sides, which is expected to be transparent to the consumer, will solve some, but not all, problems related to spectrum demand. Certainly, if the model proves effective, LightSquared will find itself with competitors in no time. But in the interim, it stands to do well by innovating. And the fact that it is also doing good work (think Indian Health Service) only makes its offerings an even better business case.
Riches do not consist of the possession of treasures, but in the use made of them. ~ Napoleon Bonaparte