[Infowarrior] - Get ready for LightSquared broadband

[Richard Forno]

Get ready for LightSquared broadband (Verizon and AT&T not fans)

By Matthew Lasar | Last updated about 14 hours ago

http://arstechnica.com/telecom/news/2010/07/get-ready-for-lightsquared-broadband-verizon-and-att-not-fans.ars
       
It's being billed as "the nation's first wholesale-only integrated wireless broadband and satellite network." LightSquared is a new, coast-to-coast 4G-LTE wireless broadband operation backed up by satellite coverage. The company will provide wholesale wireless to ISPs and cable operators—even device makers, content providers, and just about anybody else.

And the venture will do so as the "first truly open and net neutral wireless network," according to LightSquared's elatedly worded press release, with build-out expected to produce over 100,000 "direct and indirect private sector jobs within five years."

LightSquared will function as "a disruptive force" in U.S. wireless "by democratizing wireless broadband services," the firm's new Chair and CEO Sanjiv Ahuja proclaimed on Tuesday.

"We're providing everyone, including underserved communities, with a fast, reliable experience regardless of where they are located in the United States. This network will return our country to its rightful position as a leader in wireless broadband technology and solidify its reputation as the center of global innovation."

Anybody can

We spoke with LightSquared spokesperson Tom Surface and asked him about that "open and net neutral" phrase. Surface emphasized that those last two words shouldn't be confused with "net neutrality." But the idea is that all comers will be able to buy into LightSquared's capacity on a wholesale basis for resale to the public, even a big-box retail store.

"Anybody can use our network," Surface promised.

When we suggested Best Buy as a hypothetical wholesale customer, he called that a "good example," but went mum about actual prospects. "We are in direct talks with these potential partners," Surface told us.

Still, the potential win here is pretty obvious. By selling wholesale broadband access to entities that you don't usually associate with the broadband business, there's huge potential to get high-speed access into less populated regions where there aren't any traditional ISPs, but are plenty of retailers who might consider filling the gap.

I was pleased

This consortium came into existence following the Harbinger Capital Partners investment group's acquisition of SkyTerra Communications (now LightSquared). SkyTerra will provide the spectrum for this venture. Nokia Siemens will design the network, install equipment, and manage the operation, which consists of about 40,000 cellular base stations.

And the whole shebang will cover over 92 percent of the U.S. population by 2015, the new company pledges.

Even FCC Chair Julius Genachowski has given the news his public blessing.

"I was pleased to learn of the formation of LightSquared today," Genachowski announced. "This new nationwide 4G wireless broadband network represents more than $7 billion of new investment, with the potential to create more than 100,000 new private-sector jobs within five years. Today's announcement shows that FCC policies are helping grow the U.S. economy by catalyzing investment and job creation."

Three conditions

That last piece of credit-taking stems from the fact that the Commission approved this deal, although not everybody's crazy about some of the conditions to which Harbinger agreed.

Condition one has Harbinger promising that SkyTerra will not enter into an agreement to make its 1525 to 1660.5 MHz band spectrum available to any entity that happens to be "the largest or second largest wireless provider" in the U.S., without receiving prior Commission approval. 

Those unnamed providers would be AT&T and Verizon, who now rake in over 60 percent of mobile wireless sector  revenue, according the FCC's latest mobile competition report.

Approval, the fine print adds, "shall be at the sole discretion of the Commission (or one of its Bureaus, acting on delegated authority)."

On top of that, SkyTerra will not provide more than 25 percent of its terrestrial network access to those aforementioned providers without the Commission's prior blessing. That's condition three. The point, again, is to "promote competition and more access to the less densely populated areas," Surface reiterated.

Big isn't bad

Needless to say, AT&T and Verizon take strong exception to these measures, based as they are, AT&T charges, on a "big is bad" set of assumptions about revenue.

"Singling AT&T out for disparate secondary market treatment through conditions that create regulatory hurdles that discourage other spectrum holders from attempting to make spectrum or even excess wholesale capacity available to AT&T is simply unacceptable," the company complained to the agency in mid-April.

Ditto says Verizon, which has gotten into a bit of a tussle over the issue with smaller carrier Sprint. The latter company supports the network restriction conditions (which would not apply to Sprint, obviously). Like AT&T, Verizon says they should be rescinded, but short of that the company wants them applied to the entire wireless sector.

"Verizon Wireless's new proposal," Sprint insists, "is simply a collateral attempt to nullify the narrowly tailored conditions SkyTerra proposed to enhance the public interest benefits of the transaction." The wireless giant's "proposal to extend the conditions across the industry demonstrates its lack of conviction in its own arguments against them."

Even various Senators have gotten into the act—Kay Bailey Hutchison (R-TX), Jim DeMint (R-SC) and two others questioning the propriety of the conditions and the FCC's legal authority in this area.

The FCC is "presently reviewing" AT&T, Verizon, and Sprint's positions on this issue, Genachowski wrote back to them the same day. 

According to LightSquare's filings, the venture plans trial market test runs in Phoenix and Denver early next year.