You can see the bankruptcy filing on TMF Associates’ blog (pdf), listing among its numerous creditors Boeing and Alcatel-Lucent, who have LightSquared on the hook for more than $7 million each for satellite and communications gear. The claim amounts from other creditors are much smaller, but there is a long list of them.

Philip Falcone, whose hedge fund Harbinger Capital owns LightSquared, foretold the filing last month when he stated that bankruptcy might be the safest option for the would-be carrier, allowing it to fend off its lenders while it tried to move its nationwide LTE launch forward. In February, the Federal Communications Commission yanked a critical waiver LightSquared needed to use its satellite spectrum for terrestrial 4G when opposition from government agencies and the GPS industry started stacking up. The issue was the potential interference caused by LightSquared’s high-powered network to the country’s global positioning system satellite signals in an adjacent band.

LightSquared has been fighting the decision, demanding that the FCC either green light its network or supply it with replacement airwaves. But given the industry, government and political outcry against the company, neither scenario is likely to happen.

That leaves LightSquared with a bunch of assets to get rid of in bankruptcy, and none of them are worth all that much. It has its satellites, which Boeing might retake possession of, and it has its spectrum, which was supposed to be its most valuable asset. If LightSquared’s gamble had paid off and the L-band repurposed for 4G use, those licenses would have been worth billions, but no mobile operator would buy them now.

There may be one exception. As TMF analyst Tim Farrar postulated in his blog, Dish Network might have a way of cleaning up LightSquared’s spectrum. Dish owns S-band satellite frequencies in a far-off band. If it could combine that spectrum with LightSquared’s L-band frequencies it might be able to pull off not just a workable, but an extremely high-capacity LTE network that would steer clear of the GPS bands entirely.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• A look back at mobile in Q1
• CES 2012: a recap and analysis
• Mobile 2012 and beyond

At 2 p.m. on Monday, LightSquared will be in violation of its debt terms and will be forced into default, unless it gets another extension from its creditors or files for bankruptcy protection. According to the Journal, lenders want Philip Falcone, whose hedge fund Harbinger Capital is LightSquared’s primary owner, to agree to several terms, including stepping aside to make way for an independent board, ceding a large ownership stake of the company, and assuming personal liability for a future bankruptcy. Falcone has apparently agreed to the first term, but has balked at the others, leaving LightSquared few other options but bankruptcy.

LightSquared attempted to build a nationwide LTE network using satellite spectrum, but failed to get the final green light from regulators after a firestorm of controversy broke out. The GPS industry and many government agencies claimed that LightSquared’s high-power terrestrial 4G network would interfere with millions of commercial, industrial and government GPS devices. LightSquared’s spectrum sits right alongside the global positioning system band.

Without a full terrestrial network waiver, LightSquared’s primary asset, its spectrum, is worth little, but satellite broadband analyst Tim Farrar thinks there may be one interested party: Dish. In his blog, Farrar wrote that Dish might seek to pair its own S-band satellite frequencies with LightSquared’s L-band, creating an LTE network that can span an enormous chunk of airwaves. To make the deal palatable to regulators, Farrar said, Dish likely would need to guarantee the part of the L-band near GPS would remain off limits. But even if it sacrificed those airwaves Dish could still double the size of the downlink capacity.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• A look back at mobile in Q1
• CES 2012: a recap and analysis
• Connected world: the consumer technology revolution

LightSquared’s value is tied up in its 1.6 GHz satellite spectrum, a 50-MHz-plus block of satellite frequencies it is fighting desperately to repurpose for LTE. If it gets approval from the Federal Communications Commission to launch, that spectrum would be worth billions. Those airwaves would form the foundation of a nationwide LTE network providing heaps of wholesale capacity that LightSquared could sell to other carriers and any other company that wanted to get into the 4G business.

If LightSquared doesn’t get the go-ahead for LTE, though, its licenses wouldn’t become worthless, but it’s value would be greatly reduced. It would only be able to use that spectrum for satellite broadband, which simply can’t deliver the speeds or scale to the volumes of subscribers that an LTE network could. It’s becoming much more likely that a satellite-only future is in LightSquared’s cards.

The government agency overseeing the GPS satellite network is recommending that LightSquared’s plans be stopped, joining the now resounding chorus of government and industry voices that claim LightSquared’s network would cause chaos for millions of GPS receivers, which all depend on the location and timing signals in a nearby band. With that kind of opposition – plus new provisions instituted by Congress that would block LightSquared if any interference concerns remain – the chances of an FCC green light are slim, if not non-existent.

LightSquared is fighting back and has even begun accusing GPS device maker Garmin and Trimble of using their influence with government GPS authorities to rig the evidence against the carrier. Ultimately LightSquared wants more testing, but that testing will take time that the would-be carrier doesn’t have. LightSquared said Wednesday that has enough cash to keep going for several quarters, but after that it’s in trouble. Given the cloud over its network plans, no one would be willing to invest more money in the company.

A lot of options, but few of them good

If LightSquared is forced into bankruptcy or decides to negotiate with its bondholders outside of the courts, that could mean a transfer of control from principle investor Harbinger Capital Partners, run by Philip Falconer, to its debt-holders. If Icahn gains control of the company he will have some interesting choices to make.

Icahn could continue Falcone’s fight against the GPS industry, but that looks to be a losing battle. He could decide to run LightSquared solely as a satellite network, though the money to be made there might not justify the trouble. He could try to sell LightSquared’s L-band licenses, but without a waiver to build LTE he wouldn’t get much money and may not even find bidders. In other words, Icahn might get the company on the cheap, but he wouldn’t be left with much of a business to either revive or dismantle.

How patient is Carl Icahn?

There is one additional option, though, if Icahn has the patience for it. He could sit down with the GPS industry and government agencies to develop a long-term plan to make the L-band palatable for LTE.

LightSquared is right about one thing: The GPS device makers have designed their receivers in such a way that they reach outside of the GPS bands and into LightSquared’s spectrum. That wasn’t a problem when the only thing in those frequencies were low-powered satellite waves. But a high-powered LTE network would overpower those sensitive GPS devices.

Even if LightSquared is in the right, the FCC still can’t just simply give LightSquared the go-ahead when the whole GPS system is at risk. But the government also has every interest in repurposing as much spectrum for mobile broadband as possible. That would mean requiring GPS receiver makers like Garmin and Trimble to put filters in their new devices and develop a plan to either replace or retrofit older devices in the field.

Commercial GPS device makers haven’t shown any willingness to even consider such a plan, but they might be more agreeable if given some breathing room. LightSquared is trying to barrel out its LTE network in a matter of months, while such a large scale replacement program would take years, if not the better part of decade. The question is whether Icahn or any investor would be willing to wait that long before seeing a return.

Indecision image courtesy of Flickr user, san_drino
Thinker image courtesy of Flickr user Mike Disharoon

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Confused about the wireless markets? Here’s a breakdown
• A look back at mobile in Q1
• CES 2012: a recap and analysis

Last week, the government agency overseeing the national GPS satellite network, the National Space-Based Positioning, Navigation and Timing Executive Committee, or PNT-ExComm, reached the damning conclusion that there is no network LightSquared could build without overwhelming the signals millions of GPS navigation and timing devices depend on. To break ground on its LTE network, LightSquared needs a final okay from the FCC, but its approval is conditional upon LightSquared proving its high-powered LTE network doesn’t interfere with devices using the neighboring low-powered GPS band.

LightSquared EVP of Regulatory Affairs and Public Policy Jeff Carlisle said the burden of proof the commercial GPS industry wants LightSquared to meet is not only insurmountable, but was in fact established to ensure the committee would reach a foregone conclusion. Carlisle said PNT-ExComm invited commercial GPS device makers to formulate and conduct the tests in its study, which still hasn’t been released to the public. That “biased and co-opted” process practically guaranteed the results would be skewed against LightSquared, Carlisle said.

“The testing just doesn’t reflect reality and it was probably never intended to,” Carlisle said. He pointed to what LightSquared believes are three specific flaws in PNT-ExComm’s test process:

• GPS device manufacturers – LightSquared wouldn’t name specific vendors – brought antiquated and pre-commercial devices to the tests, with the intention of producing more negative results. “The initial test parameters were chosen for failure,” said Ed Thomas, a former FCC chief engineer who now works as a consultant for LightSquared.
• The testing methodology is set at the most miniscule and unreasonable measure of what constitutes interference. LightSquared has said in the past that a single-decibel change is the lowest level of interference a typical GPS receiver can detect, but it doesn’t affect the performance of devices.
• Carlisle said the whole process was “shrouded in secrecy” to hide PNT-ExComm’s flawed methodology. At one point, the testing was delayed, Carlisle said, so GPS vendors could switch out the device set to gain results more favorable to its industry.

The would-be carrier is basically accusing GPS vendors of falsifying data in a government study. Those are serious charges. Though Carlisle and Thomas didn’t name any specific vendors in its call, in a follow-up email, a LightSquared spokesman said both Garmin and Trimble Navigation submitted their devices and were on-site during the tests. The Coalition to Save our GPS, which represents GPS manufacturers in this fight, hasn’t responded yet, but it will almost certainly put out a statement in the next few hours. We’ll update the post when that happens.

Update: As you would imagine, the Save Our GPS Coalition isn’t too happy with LightSquared’s accusations against its founding members Garmin and Trimble. Trimble vice president and general counsel Jim Kirkland lashed back at LightSquared with the following statement:

At each and every turn in this process, whenever LightSquared does not like a test result or ruling, it either seeks to change the parameters or cries foul – and frequently both. Today’s LightSquared statement is more of the same. A year ago, the FCC’s International Bureau provided a conditional waiver to LightSquared, and that condition was a categorical requirement that it prove its plans would not interfere with GPS.  LightSquared assured one and all that its plans would not cause interference with GPS. But test after test has shown that LightSquared’s ill-conceived plans do in fact cause widespread interference with GPS.

“LightSquared does not like the test results, so it is attacking the testers. Last Friday’s report reflects the unanimous view of nine different federal government departments and agencies that LightSquared’s proposals would interfere with critical functions, including the Department of Defense, the FAA and the Department of Homeland Security. The technical evidence speaks for itself and no individual, company or government body can legitimately be blamed for the clear defects of LightSquared’s ill-conceived proposal or the failure of that proposal to pass an extensive, fact-based review process.”

As for next steps, LightSquared is asking the NTIA to re-evaluate ExComm’s test results in light of these accusations and to conduct its next round of testing on high-precision GPS receivers through an independent lab with no affiliation to and no direct participation from the commercial GPS industry. Such tests would take several months to devise and perform, and LightSquared may be running out of time. During the call, LightSquared claimed it had funds to keep on fighting for several quarters, but in recent financial statement obtained by Reuters, LightSquared said it would run out of cash at the beginning of the second quarter.

Update: The FCC is steering clear of this potential fire keg. In an email, FCC spokesperson Tammy Sun made this comment:

We are awaiting completion of recommendations from NTIA. As we have said from the outset, the FCC will not lift the prohibition on LightSquared to begin commercial operations unless harmful interference issues are resolved.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• A look back at mobile in Q1
• LTE-Advanced: what it is and isn’t
• Confused about the wireless markets? Here’s a breakdown

LightSquared is getting a slight reprieve in its race to get its proposed LTE network built. LightSquared’s network partner, Sprint, has given the would-be operator a 30-day extension to get regulators to green-light the launch of its controversial 4G service, the Wall Street Journal reported. But if LightSquared is unable to secure that approval by Jan. 30 — which seems increasingly unlikely — its plans would effectively be quashed. Without Sprint, LightSquared’s build-out costs would multiply, putting further pressure on the already cash-strapped carrier.

LightSquared wants to build a nationwide wholesale LTE network and sell its capacity to other carriers, MVNOs and retail brands, but it doesn’t plan to do it alone. Sprint contracted with LightSquared to build its network, hanging it off its new software-based Network Vision architecture, which can support multiple radio technologies. One of the conditions of the deal, however, was that LightSquared would wrap up the necessary Federal Communications Commission approvals by Jan. 1, a deadline that it missed despite requests that the FCC fast-track the process.

A month extension won’t be nearly enough time, though, considering the obstacles LightSquared faces. The operator is locking horns with the commercial GPS industry and government agencies, which have produced a growing body of evidence that LightSquared’s network in the L-band satellite frequencies will interfere with nearby global positioning system signals, potentially knocking out millions of navigation devices throughout the country. LightSquared refuted those studies, but it also made a series of concessions, whittling down the scope and power of its network in hopes of coming to some kind of compromise with its critics.

LightSquared has asked for more testing using its latest scaled-back network configuration, but that process could take months and there is no guarantee that a new batch of tests would appease the GPS industry or the government. LightSquared is also up against a funding clock. Financial statements leaked to Reuters show that LightSquared could run out of money by the beginning of the second quarter, which could drive the company into bankruptcy. In addition, LightSquared has a sizable payment coming due to Sprint, which is unlikely to start building its network until cash is on the table.

LightSquared estimated that reusing Sprint’s infrastructure would save it $13 billion in network construction and operational costs through 2020. If Sprint pulls out of the deal, LightSquared would have to build its network from scratch, requiring it to raise billions of dollars more in capital.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Confused about the wireless markets? Here’s a breakdown
• A look back at mobile in Q1
• AT&T’s loss with T-Mo likely to be another bidder’s big gain