LightSquared Must Meet FCC Deadlines To Build Wireless Network

LightSquared

LightSquared must raise billions of dollars in order to build a nationwide wireless broadband network using satellites. But if it doesn’t act fast, it may miss critical deadlines laid out by the FCC and could lose its airwaves, according to the November issue of Bloomberg Markets magazine, which features a front page article titled “From Subprime to Satellites.”

LightSquared is backed by Harbinger, a hedge fund managed by Philip Falcone, who got rich by out-smarting the subprime housing bubble. The cash requirements to build a network of its size will be considerable. Harbinger has spent $2.9 billion so far, and will have to pay Nokia (NYSE: NOK) Siemens Networks $7 billion to build and operate its network over the next eight years.

But the money-hungry operation, which is computing against already established players, like AT&T (NYSE: T), Verizon and Clearwire (NSDQ: CLWR), faces opposition from investors within Harbinger. That ultimately may put a snag in its plans. Already, investors in Falcone’s hedge fund are losing faith and increasingly uncomfortable with the amount of funds being redirected to this risky bet. In fact, Bloomberg reports that The New York State Common Retirement Fund is pulling its entire $68 million investment in Philip Falcone’s Harbinger Capital Partners.

If it can’t raise the capital to start construction, there will be consequences. One of the FCC’s requirements is that it will have to serve 100 million people by the end of 2012. Here’s some milestones it will have to meet along the way:

December 2010: Start building a network of 36,000 cellular base stations and launch a satellite.

First half of 2011: Begin trials of wireless broadband service in Baltimore, Denver, las Vegas and Phoenix.

Mid-2001: Provide service to smartphones that can use both cellular and satellite network.

Dec. 31, 2012: Expand cellular network capacity to serve 100 million people in the U.S.

Dec. 31, 2015: Enable 260 million people, or 90 percent of the U.S. population, to access network.

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