Welcome to a New Era of Spectrum Speculation

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Reportedly, LightSquared, the company trying to create a wholesale, fourth-generation, wireless network, is thinking about an initial public offering. While part of me loves the idea of reading the details behind the network operator that doesn’t yet have a network in the S-1 filing, there’s a huge part of me that says the company is planning to take investors for a ride using the current spectrum crisis as cover for a questionable business plan.

Because, at the end of the day, what LightSquared has right now is 53 MHz of spectrum, an interference problem with GPS in some of that spectrum, and lots of plans. Yes, back in the days of the bubble, IPOs were built on less, but I think LightSquared may be milking the spectrum crisis. The rallying cry of that crisis claims the U.S. will run out of spectrum by 2013 and the demand for mobile broadband will overtake the nation’s cellular networks and grind them to a halt.

Some people view this coming crisis as making holding spectrum akin to finding an oil well or a platinum mine in your back yard, but that’s not exactly true. Because all spectrum is not created equal, it’s more like finding a meteorite that may contain some really valuable metal, or it may contain something that’s so fragmented or worthless that getting it out of the rock is an economically unfeasible proposition.

That being said, if LightSquared can raise the money that so far has eluded it, placate the GPS industry and then make good on some of its build-out plan, it may actually build a working network and business. To its credit, LightSquared has no shortage of the type of boldness required to build a wireless network. You have to be in it to win it in this business, and Phil Falcone, the owner of Harbinger Equity Partners, the private equity firm backing LightSquared, is most certainly in it — to the tune of billions.

Meanwhile, the spectrum crisis has brought us another questionable deal, AT&T’s $39 billion bid for T-Mobile. Using the spectrum crisis as a rationale for taking out the No. 4 player in the market and hurting the No. 3 player is pretty ballsy, but brilliant. We’ll have to see if AT&T gets away with it. As long as the FCC continues pitching a crisis, though, I’m wondering who else might take advantage of this airwave apocalypse to boost their bottom lines.

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