The Federal Communications Commission (FCC) has announced that it will seek public comments beginning next week on revoking the tentative permit it granted to LightSquared Inc. to build a high-speed wireless broadband network. The announcement effectively kills the company’s plans.
Sprint Nextel Corp. (NYSE: S), which had an agreement to build LightSquared’s network for $9 billion and $4.5 billion in credits, had an original deadline for LightSquared’s FCC approval of January 1. The carrier extended the deadline to the end of January, but now that deal is also likely lost. Sprint, which is also supporting Clearwire Corp.’s (NASDAQ: CLWR) network, is probably just as happy to see the revocation.
LightSquared was unable to demonstrate that its network would not interfere with other GPS systems or with aviation navigation. While new equipment from makers like Trimble Navigation Ltd. (NASDAQ: TRMB) and Garmin Ltd. (NASDAQ: GRMN) will eventually be compatible, existing systems are too susceptible to interference from the proposed wireless network.
Clearwire’s shares are up about 3% at $2.35 in a 52-week range of $1.24-$6.11.
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