The news is a setback to deployment of the ambitious 4G terrestrial-satellite-based service--which the company said could provide mobile high-speed Internet service to as many as 260 million people across the United States.
A government group tested the service's interference with various devices and presented the findings to the Space-Based Positioning Navigation and Timing Executive Committee, which includes members of the Department of Defense and Department of Transportation.
[ The government needs to do a better job of protecting the nation's infrastructure. Read Smart Grid Security Threatened By Fragmented Control. ]
A joint statement from the two departments said that tests found that the service won't interfere significantly with cellular telephones, but a separate analysis by the Federal Aviation Administration (FAA) showed that its signals interfered with a flight safety system designed to warn pilots of approaching terrain.
The service also caused "harmful interference" to the majority of other general-purpose GPS receivers that were tested, according to the agencies.
The group will send a final test report to the National Telecommunications and Information Agency (NTIA), which helps the president set telecommunications policy and represents federal agencies to the Federal Communications Commission (FCC). The NTIA will then present the report to the FCC, which is responsible for approving the Lightsquared service.
In response, Lightsquared issued a statement to "profoundly disagree with the conclusions drawn with respect to general navigation devices."
The company said, "LightSquared has had the legal and regulatory right to use its spectrum for eight years over two administrations. The testing further confirmed that the interference issues are not caused by LightSquared's spectrum, but by GPS devices looking into spectrum that is licensed to LightSquared. We have taken extraordinary measures--and at extraordinary expense--to solve a problem that is not of our making."
Serious capital has already gone behind the creation of Lightsquared's nationwide Long-Term Evolution network, which aims to use 40,000 cellular basestations, plus Sky Terra satellites, to cover 92% of the U.S. population by 2015. New York-based billionaire Phil Falcone has invested $3 billion in the service through his investment firm Harbinger Capital Partners, which launched Lightsquared.
The company also has lined up some significant partners. It recently inked a $7 billion contract with Nokia Siemens Networks to build and operate the network, and another deal with Airspan Networks, which will utilize LightSquared's spectrum for smartgrid applications in various utility markets.
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