Attachment September 24 Letter

This document pretains to SES-MOD-20121001-00888 for Modification on a Satellite Earth Station filing.

IBFS_SESMOD2012100100888_967707

September 24, 2012

VIA ELECTRONIC FILING

Ms. Marlene H. Dortch
Secretary
Federal Communications Commission
445 12th Street, SW
Washington, DC 20554

       Re:     Ex Parte Communication & Request for Action
               IB Docket Nos. 08-184, 11-109; ET Docket No. 10-142; IBFS File No. SAT-
               MOD-20101118-00239

Dear Ms. Dortch:

                In March 2010, as part of the Commission’s approval of the acquisition of
LightSquared, LightSquared Subsidiary LLC and its affiliates (collectively, “LightSquared”) by
investment funds managed by Harbinger Capital Partners (“Harbinger”), the Commission and
Harbinger agreed to a set of conditions, including that LightSquared would meet stringent build-
out and coverage milestones to construct a network to provide “commercially viable mobile
broadband services.” 1 In January 2011, the Commission constrained LightSquared’s ability to
offer commercial service on its L-band frequencies until certain concerns relating to GPS were
resolved. 2 In February 2012, based on those GPS concerns, the Commission proposed to
suspend indefinitely or revoke all of the ATC-related authorizations on which LightSquared’s
terrestrial network is premised. 3 Proceedings relating to this proposal are still pending before the
Commission.

                The February 2012 Public Notice did not expressly address the build-out
milestones set forth in the Harbinger Transfer Order. However, for the reasons set forth below,
LightSquared believes that it is necessarily relieved of the obligation to meet the build-out
milestones set forth in the Harbinger Transfer Order in view of the Commission’s broader action
and proposed actions set forth in the February 2012 Public Notice, and the real-world
consequences that such actions engendered for the company. By this letter, LightSquared
respectfully requests confirmation from the Commission that the build-out milestones contained

1
       SkyTerra Communications, Inc., Transferor and Harbinger Capital Partners Funds,
       Transferee, 25 FCC Rcd 3059, at ¶ 72 & Attachment 2 (2010) (“Harbinger Transfer
       Order”).
2
       LightSquared Subsidiary LLC, 26 FCC Rcd 566, at ¶ 48 (2011) (“Conditional Waiver
       Order”).
3
       Public Notice: International Bureau Invites Comment on NTIA Letter Regarding
       LightSquared Conditional Waiver, IB Docket No. 11-109, DA 12-214 (rel. Feb. 15,
       2012) (“February 2012 Public Notice”). In proposing this action, the Commission did
       not propose any alternative path that would enable LightSquared to move forward with
       its network deployment.


Ms. Marlene H. Dortch
September 24, 2012

in the Harbinger Transfer Order no longer apply, and that LightSquared is relieved of those
milestones until they are reassessed once the status of LightSquared’s ATC authorizations is
clarified. These actions also will permit the Commission to consider alternative proposals that
promote the strong public interest in facilitating the deployment of LightSquared’s wireless
broadband network, while also fostering co-existence of that network with GPS receivers.

I.     BACKGROUND

                LightSquared has proposed – and still desires – to deploy a terrestrial wireless
network that will inject much needed wholesale capacity, competition, and innovation into the
wireless broadband marketplace. The Harbinger Transfer Order incorporated a set of conditions
to ensure that the expected competitive benefits of LightSquared’s terrestrial network would be
realized.

                These conditions included certain network build-out milestones. These build-out
requirements would have required LightSquared to build and operate, in less than five years, a
nationwide broadband terrestrial network as extensive as that of other major national carriers.
The first of these would have required LightSquared to provide terrestrial coverage to at least
100 million people in the United States by December 31, 2012. 4 Accordingly, LightSquared
needed to marshal significant financial, technical, and business resources.

             To this end, immediately after the issuance of the Harbinger Transfer Order in
March 2010, LightSquared began its work in earnest. For example,

               •   LightSquared raised over $2 billion in equity and debt capital from
                   September 2010 to July 2011.
               •   LightSquared triggered the first phases of its Cooperation Agreement
                   with Inmarsat in August 2010 to begin the process of rationalizing its
                   spectrum to support a viable terrestrial and satellite broadband network
                   at a cost of over $500 million.
               •   LightSquared built two next-generation satellites that were specifically
                   designed to support its planned terrestrial and satellite network at a
                   cost of $1.1 billion and launched the first of those satellites in
                   November 2010.
               •   LightSquared entered into an innovative commercial arrangement in
                   June 2011 to co-build its terrestrial network with that of a major
                   national wireless carrier and made over $240 million in payments to
                   that carrier.
               •   LightSquared signed contracts to provide wireless network capacity to
                   over 30 customers, who were attracted by LightSquared’s innovative
                   wholesale model.


4
       Harbinger Transfer Order, Attachment 2, ¶ 5. LightSquared also was to provide
       terrestrial coverage to at least 145 million people in the United States by December 31,
       2013, and to at least 260 million people in the United States by December 31, 2015. Id.
2


Ms. Marlene H. Dortch
September 24, 2012

               In the February 2012 Public Notice, however, citing GPS concerns, the
Commission proposed to suspend indefinitely or revoke all of the ATC-related authorizations on
which LightSquared’s terrestrial network is to be built. LightSquared continues to believe that it
should be permitted to deploy its network, and that a solution that both facilitates that
deployment and that accommodates concerns regarding GPS compatibility is possible.
Nevertheless, it is undeniable that the February 2012 Public Notice has placed LightSquared’s
ATC authorizations in jeopardy and has rendered the deployment of LightSquared’s network
impossible for the time being.

II.    REQUESTED ACTION

               LightSquared respectfully requests confirmation from the Commission that the
build-out milestones in the Harbinger Transfer Order no longer apply because of the effect of
intervening Commission actions since those build-out milestones were first imposed.
LightSquared believes that its build-out requirement should be revisited once GPS questions over
LightSquared’s ATC authority have been resolved and the path forward has been charted for the
company.

                 LightSquared submits that the course it proposes here is consistent with basic
principles of reasoned agency decision-making. 5 In this case, the February 2012 Public Notice
has rendered it unreasonable and a practical impossibility for LightSquared to meet its build-out
milestones, because it proposes the revocation or suspension of the very regulatory authorization
on which the build-out of LightSquared’s network is premised. Indeed, in 2011, the Commission
did state that the agency would not permit LightSquared to begin commercial service without
first resolving GPS interference concerns. 6 Put simply, LightSquared cannot be expected to
build and deploy a network where the authorization to deploy and operate that network has been
proposed to be suspended or revoked. 7 LightSquared can make plans to meet any set of build-out
requirements – including rebuilding its financial capacity and restarting the process of
rationalizing its spectrum – only after the GPS issues are ultimately resolved and the status of its
ATC authorizations is clarified.

              Additionally, were LightSquared to determine to commence network deployment
notwithstanding the February 2012 Public Notice, LightSquared cannot predict what technical

5
       In other circumstances, regulatory agencies have granted relief when they recognized that
       compliance with a legal requirement is made impossible because of the impact of other
       intervening regulatory requirements. Alliance for Cannabis Therapeutics v. DEA, 930
       F.2d 936, 940 (D.C. Cir. 1991); see also Dep’t of Health & Human Servs. v. RxUSA
       Wholesale, Inc., 285 F. App’x 809, 811 (2d Cir. July 10, 2008).
6
       See Letter from Chairman Julius Genachowski to the Hon. Charles E. Grassley (May 31,
       2011) (“[T]he Commission will not permit LightSquared to begin commercial service
       without first resolving the Commission’s concerns about potential widespread harmful
       interference to GPS devices.”).
7
       For example, in recognition of the fact that it was no longer practical or viable for
       LightSquared to continue network deployment efforts in the wake of the February 2012
       Public Notice, in March 2012, LightSquared’s principal network contractor, a major
       wireless carrier, terminated its contract to co-build LightSquared’s network.
3


Ms. Marlene H. Dortch
September 24, 2012

parameters should apply such that the equipment used in its terrestrial network will be consistent
with the resolutions identified to the GPS compatibility question. Under these circumstances, it
would be imprudent and impractical for LightSquared to build a network under its existing ATC
authorizations at significant cost that the Commission may nonetheless determine to be
incompatible with GPS devices and inconsistent with the Commission’s later directives.
Moreover, at such time as the GPS issues are ultimately resolved, LightSquared may need to
calibrate its plans to take account of changes in the marketplace and technology, especially in
light of rapid changes in the mobile wireless industry, to ensure that any business plans are
commercially viable.

                 The Commission has granted relief from deadlines in situations that are far less
compelling than those presented here. Specifically, in a number of cases, the Commission has
provided relief to licensees that are unable to meet construction requirements, in large part, as a
result of “a lack of viable, affordable equipment.” 8 In the current circumstances, however,
LightSquared is not merely experiencing difficulties in obtaining equipment due to the technical
uncertainties currently surrounding a resolution of the GPS issues, but, until those issues are
resolved, the February 2012 Public Notice proposes to suspend or vacate the very spectrum
authorizations on which LightSquared is to build its network. That the Commission has granted
relief in other, less compelling situations strongly illustrates that LightSquared cannot properly
be expected to satisfy the milestones in the circumstances presented here. 9

                LightSquared also believes that relief from the milestones is consistent with the
Commission’s general policy on build-out requirements. Build-out requirements ensure that
licensees put to use the country’s valuable and scarce spectrum resources. If a licensee fails to
do so, the Commission can give others an opportunity, so those resources do not lie fallow. 10


8
       Requests of Ten Licensees of 191 Licenses in the Multichannel Video and Data
       Distribution Service for Waiver of the Five-Year Deadline for Providing Substantial
       Service, 25 FCC Rcd 10097, 10102 (2010) (stating that “we find that the record
       demonstrates that there is a lack of viable affordable equipment”); see also Consolidated
       Request of the WCS Coalition for Limited Waiver of Construction Deadline for 132 WCS
       Licenses, 21 FCC Rcd 14134, 14139 (2006) (noting that “deployment attempts using
       available equipment have been marred by technical problems or proved to be
       economically infeasible”); Applications Filed By Licensees in the Local Multipoint
       Distribution Service (LMDS) Seeking Waivers of Section 101.1011 of the Commission’s
       Rules and Extensions of Time To Construct and Demonstrate Substantial Service, 23
       FCC Rcd 5894, 5905 (2008) (citing “difficulties in obtaining viable, affordable
       equipment” as a leading factor on which relief was granted); Warren G. Havens, 19 FCC
       Rcd 12994, 13000 (2004) (finding that it is not “reasonable to fault licensees who
       obtained licenses and then faced an unexpected loss of equipment”).
9
       See Green Country Mobilephone, Inc. v. FCC, 765 F.2d 235, 237 (D.C. Cir. 1985) (citing
       Nat’l Labor Relations Bd. v. Wash. Star. Co., 732 F.2d 974, 977 (D.C. Cir. 1984)).
10
       See, e.g., 47 U.S.C. § 309(j)(4)(B) (authorizing Commission to adopt construction
       requirements that “ensure prompt delivery of service to rural areas, . . . prevent
       stockpiling or warehousing of spectrum by licensees or permittees, and . . . promote
       investment in and rapid deployment of new technologies and services”).
4


Ms. Marlene H. Dortch
September 24, 2012

Here, until issues of GPS compatibility are resolved, those resources will necessarily lie fallow
simply because no party is in a position to deploy a terrestrial network in the L-band.
Additionally, regardless of any GPS issues, LightSquared will continue to be the MSS provider
in the L-band, making it extremely cumbersome if not impossible for an independent licensee to
provide service on that spectrum. Finally, once GPS concerns are ultimately resolved,
LightSquared will be uniquely positioned to resume the build-out and deployment of a terrestrial
network using the L-band, as it has worked for a decade to develop the technical expertise and
capability necessary to do so – experience and expertise that no other party possesses. In short,
recognition that LightSquared’s authorizations are no longer dependent on the milestones would
further the Commission’s policy to manage spectrum resources so that they are most likely to be
put to use for the public good, and would thereby further the public interest.

                Finally, if the Commission were to treat LightSquared’s authorizations as
forfeited by a failure to satisfy the milestones, it would, as a practical matter, obviate the
additional process contemplated by recent Commission statements to resolve the concerns
surrounding the deployment of LightSquared's network, 11 as well as the further proceedings
proposed by the February 2012 Public Notice itself. 12 If LightSquared's authorizations were
revoked because it is no longer reasonable, if not a practical impossibility, for LightSquared to
meet these build-out milestones, the constructive process contemplated by these recent
Commission statements would end before it began, thereby depriving LightSquared of its due
process under the February 2012 Public Notice.

                                              *   *   *

                LightSquared remains committed to fulfilling the Commission’s vision of
providing competitive wireless broadband to all Americans. LightSquared remains committed to
finding a solution that allows it to deploy a wireless network in a manner that addresses concerns


11
       In response to a Congressional inquiry regarding the Commission’s consideration of
       authorizing LightSquared to use alternative spectrum for commercial broadband use,
       Chairman Genachowski stated that LightSquared had not at that time submitted a petition
       regarding such use. See Letters from Chairman Julius Genachowski to the Hon. James P.
       Moran, the Hon. Steven R. Rothman, the Hon. Maurice D. Hinchey, the Hon. Ander
       Crenshaw, and the Hon. Rodney Alexander (Aug. 13, 2012). Chairman Genachowski
       further stated: “Should that change, the Commission will coordinate with NTIA as
       necessary, and consider any proposals carefully.” Id. LightSquared looks forward to
       beginning such a process that will lead to a comprehensive and integrated proposal.
12
       See February 2012 Public Notice at 4. Moreover, if the Commission were to treat a
       failure to reach the milestones as grounds to revoke LightSquared’s ATC authorizations,
       it would, in effect, be allowing the February 2012 Public Notice to consummate an
       outcome that that document merely proposed, and submitted for public comment. The
       February 2012 Public Notice caused LightSquared to delay further investment of the
       network, as any rational economic actor would. To now revoke LightSquared’s
       authorization because the company paused pending a final outcome would be
       inconsistent with rational agency decision-making.

5


Ms. Marlene H. Dortch
September 24, 2012

raised by the GPS industry. The actions requested here will provide needed clarity and help all
parties to these proceedings explore a path forward whereby they might work with the
Commission to achieve these goals.


                                            Respectfully submitted,

                                            /s/ Jeffrey J. Carlisle
                                            _____________________________________
                                            Jeffrey J. Carlisle
                                            Executive Vice President, Regulatory Affairs
                                                and Public Policy
                                            LIGHTSQUARED INC.
                                            10802 Parkridge Boulevard
                                            Reston, VA 20191
                                            703-390-2001




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Document Created: 2012-09-24 14:26:28
Document Modified: 2012-09-24 14:26:28

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