Sprint Abandons LightSquared Investment, Demands FCC Approval

Sprint announced on Thursday that they have officially halted all investments in troubled startup LightSquared. The company fears that the company will encounter further difficulty in securing an operating license.

The move to halt its investment comes after Sprint gave the startup 30 days to receive FCC approval before agreeing to move forward with further collaboration.

In a separate report it’s believed LightSquared will run out of operating funds by Spring 2012 if more capital isn’t procured for the company.

During a Citigroup conference Sprint CEO Dan Hesse said he hopes LightSquared can overcome interference issues and move forward with plans to launch a 4G nationwide network.

Hesse was referring to government tests in which the LightSquared system interfered with various GPS signals, jamming navigation equipment. LightSquared purchased spectrum that sits right beside GPS spectrum.

For its part LightSquared says the problem isn’t with their system but rather a lack of signal filters found on GPS equipment, placing the blame squarely on the GPS equipment industry. In the meantime while critics agree that Lightsquared may be correct in their assessment of the situation it’s believed the FCC won’t allow the company to move forward if the technology will wreak havoc on existing GPS equipment.

Without the support of Sprint the company could still move forward with smaller regional plans but will likely forgo a national 4G system in the near future.

In the meantime the GPS industry appears to be doing very little if anything to investigate their own shortcomings based on signal filtering claims.

According to a LightSquared spokesperson the company’s continue to work together:

LightSquared and Sprint have been actively monitoring the timing of the FCC’s evaluation and authorization of our network. As both companies remain optimistic that we will receive FCC approval early this year, we collectively agreed to a 30-day extension of certain terms of our spectrum hosting and network services agreement. The deal between the two parties remains intact.

Do you think the FCC should quickly investigate GPS equipment and make GPS providers bring their products up to spectrum targeting standards?