Sprint Nextel Has Given The Company Another Six Week Extension

LightSquared has until mid-March to resolve its issues with the FCC over its proposed 4G broadband network under an extension of its deal with Sprint Nextel. The move comes after a 30 day extension was granted to the company at the end of 2011. Approval of the service from the FCC is a condition of a 15 year agreement between the wireless provider and the start up broadband company. Under the agreement, the two would share spectrum, as well as network construction and equipment costs.

The Wall Street Journal reports that the FCC is accepting public comment on LightSquared's case that legacy GPS devices are not entitled to protection from interference because they do not meet government manufacturing standards. Many independent studies have shown that LightSquared's transmissions would cause existing GPS receivers to be virtually useless when near one of LightSquared's terrestrial transmitters. The company has been harshly criticized by a group of nine government agencies which all agree that the existing GPS system and LightSquared can not coexist.

The Sprint deal is important to LightSquared, as it could save the company some $13 billion in expenses through the end of the decade, according to the paper.

Meanwhile, as ANN reported in January, some think the startup company will run out of money before they can get the system up and operating. Carl Icahn, who has a history of acquiring interests in distressed companies he expects to go bankrupt, then seizing control after they actually file, has reportedly been buying up LightSquared debt, which sunk to trading at about 40 cents on the dollar in December after delays in FCC approval of the 4G network made earlier investors edgy.

But even if LightSquared fails, it won't be the end of the story. The radio spectrum the company controls will only be back in play.

FMI: www.fcc.gov