Anyone who has been following the long-simmering LightSquared-vs-GPS saga should not be at all surprised by Monday’s announcement that LightSquared LLC has filed for protection from creditors under chapter 11 of US bankruptcy law. The writing has been on the wall for many months now, ever since the GPS industry, outraged about the potential for interference, began a concerted effort to block LightSquared’s plans to roll out a 4G wireless network, one that uses satellite frequencies for terrestrial communications.
It won’t be the first time a huge mobile-satellite communications enterprise has gone up in smoke.
Indeed, the current debacle brings back memories of Iridium SSC, a satellite communications company that went into chapter 11 just nine months after setting up its service in 1998. Why? In a nutshell: Technological change overtook Iridium, which was trying to sell mobile communications services that worked anywhere in the world—a weak selling point once terrestrial wireless networks became ubiquitous.
LightSquared’s problems might seem to belong to a different category. After all, it had plenty of customers, in this case other companies who were to resell the wholesale 4G communications services that LightSquared provided. The problem was just that LightSquared got bogged down into a regulatory quagmire over concerns about interference to GPS reception.
I’d argue, though, that LightSquared’s Achilles heel is fundamentally similar to Iridium’s. Both companies weren’t able to keep pace with technological change. For Iridium, it was the proliferation of terrestrial wireless networks during the 1990s. For LightSquared, it’s been the proliferation of GPS equipment in the 2000s—and the growing popularity and importance of satellite navigation in the everyday lives of millions of people.
Think back to a decade ago, when LightSquared’s predecessor companies began formulating their plans. At that time, Ford and BMW had just launched their first GPS-based navigation systems as expensive options. Few people had GPS in their cars. Since then, inexpensive GPS units have flooded the automotive market, GPS-enabled smartphones have given their users all sorts of location-based services, and US airliners are switching from radio-navigation systems to GPS. That’s all to say, GPS technology has become entrenched in our daily lives, and anything that threatens its operation now is in for a big political struggle. Had LightSquared been in a position to launch its service 10 years ago, the situation would have been very different.
It’s heartening to remember that the Iridium satellite network has proved very useful (albeit after the original company sold off its satellite constellation at bargain-basement prices). Based on a different business model, the system’s new owner, Iridium Communications Inc., seems to be doing pretty well. Perhaps LightSquared will undergo a similar transformation.
(Photo credit: nps.gov)