Washington — LightSquared’s mobile broadband
network plans may be on indefinite hold here, but the
company must still account for all the business deals it
made in anticipation of final Federal Communications
Commission approval that did not materialize.
Mobile satellite-services company Inmarsat said last
week that LightSquared has defaulted on a $56.25 million
payment under the companies’
related to LightSquared’s
so-far unsuccessful effort to
launch a national wholesale
LightSquared has countered
that the trigger for that payment has not yet occured.
LightSquared was dealt a major, if not fatal, blow last
week when the FCC moved to rescind the waiver it had
granted the company, saying that there appeared to be no
path forward without interference to Global Positioning
System receivers. LightSquared disputes that finding, but
it now has a series of deals related to the wireless broadband
buildout — and with potential users — but no wholesale
network to offer.
“On 20 February 2012, Inmarsat issued a notice of default
to LightSquared under the Cooperation Agreement,”
Inmarsat said in a statement. “This notice triggers a period
of 60 calendar days during which LightSquared can remedy
the payment before Inmarsat is entitled to enforce its
rights and remedies under the agreement for payment default,
including pre-agreed spectrum arrangements and
termination of certain LightSquared rights under the Cooperation
The payment was due “upon the completion of ‘Phase 1
transition,’ which has now occurred,” Inmarsat said.
LightSquared disagreed. “LightSquared has raised several
matters that require resolution before the first phase
comes to a close,” the company said in its own statement.
“The terms of the agreement
allow for additional time to
resolve pending questions
before phase one is complete
and the final payment is due.
LightSquared is committed
to fulfi lling its business plan
to bring world-class wireless broadband connectivity to millions
of Americans and believes that Inmarsat will remain
an important partner in the company’s future endeavors.”
Inmarsat said it was in discussions with LightSquared
about the payment, but LightSquared could provide no assurances
that it would get the money.
The FCC granted LightSquared a conditional waiver to
use its satellite spectrum for terrestrial broadband service
— the FCC is looking to promote price and service competitiion
as part of an effort to spur wireless broadband
adoption — but the waiver was conditioned on resolving
interference issues that remain unresolved, and the FCC
and the National Telecommunications & Information Administration
suggest, unresolvable in the near future.