Sprint-LightSquared deal puts off network FAA warns could kill 800
GPS interference could interrupt plans for FAA upgrade and lives it may save
If you or your company use Sprint for your cell-phone and mobile-everything connectivity, things are looking up. Or, if not up, at least it looks as if they might get more exciting.
In a deal announced yesterday, Sprint agreed that, for the next 15 years, it would sell a potential rival capacity on its wireless and LTE networks.
Under the deal, gigantic, controversial startup LightSquared will pay Sprint $9 billion for access to Sprint networks LightSquared can resell to its own customers.
Sprint needs the money because it made an early bet on WiMax, which is a fine technology that could have been successful as championed by an 800-pound gorilla like Sprint. WiMax is not the 4G cellular networking protocol chosen by Verizon, however, the carrier so large that it creates a huge depression in the fabric of the cellular networking universe, like a fat man stepping onto a trampoline occupied only by children. When Verizon bounces, the other carriers fall down and roll toward wherever it chooses to be, and just hope it doesn't come down on their heads.
WiMax still exists, and is even expanding here and there; Sprint still supports it, at least for now. But LTE, not WiMax, is the commercial cellular networking protocol of the future, so Sprint has some catching up to do.
LightSquared shouldn't have to buy capacity from Sprint, of course. It has its own 3G and 4G LTE technology it has been developing and a network it has been expanding for three years.
LightSquared also has as many hundreds of millions to spend on its network as investors can throw at it, despite its legal and theoretical technical problems.
The one slight problem is that, when it bought a chunk wireless spectrum on which to broadcast its cellular service, LightSquared got one whose upper registers are a little too close to the radio frequencies used by GPS satellites and receivers for the FAA to be completely comfortable with the result.
A Federal Aviation Administration (FAA) report dated July 12 but kept secret until it was leaked to the press yesterday (PDF), predicted interference from LightSquared's LTE network could cost the FAA $70 billion in upgrades to the GPS network used for navigation by commercial airlines.
It would take ten years to redesign and re-equip the commercial air fleet with GPS systems protected from interference from LightSquared.
In the meantime the FAA claims it would have to return at least partially to ground-based navigational systems in some areas – after just moving completely onto GPS-based navigation during the past few years.
It would also have to re-design and re-plan the deployment of its next-generation GPS navigational system, which it expects will be good enough to prevent enough accidents to save 800 lives during the next 10 years.
LightSquared, by agreeing to buy its 3G and LTE spectrum wholesale from Sprint for the time being, rather than launching a service that might cause problems with GPS and would definitely cause even more painful knots in the FAA's shorts, is saving the lives of 80 commercial airline passengers per year.
Granted that's only about half the number waiting for last-minute cancellations on every overbooked flight stacked up waiting to leave major U.S. airports every 30 seconds all day, every day all year 'round.
In economic terms, 80 people on standby are worth a minimum of 80 small-sandwich-and-beverage purchases to airport food vendors at a total expenditure of $12,840,000. So you can see the economic impact is at least as big as the human cost.
LightSquared's CEO said the problem is that GPS manufacturers didn't build their gear well enough to avoid interference and their protestations to the contrary are "histrionic."
It seems unlikely we'll suddenly start having lots of airline crashes because there's a little interference from a cell network broadcasting below the frequency of the GPS network.
LightSquared is going $9 billion out of its way to avoid the possibility, though, money the FAA can expect to have to repay if it turns out there is either an easy fix for the interference or the projections about its seriousness are overblown.
For Sprint subscribers there is only more optimism that the one major cell carrier that is not in a crisis right now over either its capacity or its business practices is getting a large enough infusion of cash that it might be able to accelerate its 4G rollout.
If so, it might be able to move fast enough to keep Verizon in sight, rather than disappearing with a large enough chunk of the cellular market that it feels it can do no wrong which, of course, is when it does.