LightSquared sues GPS manufacturers, cites network deployment block

By Caroline Salls

Pittsburgh, Nov. 4 - LightSquared Inc., LightSquared LP and LightSquared Subsidiary LLC filed a lawsuit Friday seeking damages arising from the alleged wrongful conduct of three GPS manufacturers, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

The defendants are Deere & Co., Garmin International, Inc., Trimble Navigation Ltd., the U.S. GPS Industry Council and The Coalition to Save Our GPS.

"This case is about holding three GPS manufacturers responsible for a decade's worth of promises, agreements and representations, as reflected in various written contracts, writings, oral statements, conduct and otherwise," the LightSquared entities said in the complaint.

"It is about how a newly emergent wireless provider relied on those promises, agreements and representations as it marshaled the billions of dollars necessary to design and deploy a state-of-the-art wireless broadband network.

"And it is about how those three GPS manufacturers waited until those billions were invested in the necessary network infrastructure before then breaking their prior promises, reneging on their prior agreements and disavowing their prior representations - causing untold damage as a result."

Specifically, LightSquared said the defendants "engaged in a calculated effort" to block the deployment of a new wireless broadband network that would serve millions of underserved consumers at lower prices while increasing competition in the wireless industry.

FCC approvals

LightSquared said the Federal Communications Commission issued a series of orders in 2003, 2004, 2005 and 2010 that approved its plans to launch its nationwide wireless network.

According to the filing, the defendants have been closely involved in LightSquared's preparations to launch its network, and LightSquared worked directly with the defendants to resolve alleged interference concerns that could result from the FCC-authorized spectrum operations.

LightSquared said the defendants repeatedly led it to believe that all interference problems had been resolved.

As a result, LightSquared said it invested billions of dollars in its new wireless network. LightSquared said it was poised to launch its nationwide network by late 2010.

Vulnerabilities revealed

However, LightSquared said the defendants reneged on their previous contracts and promises in September 201 and disclosed for the first time that they had designed and manufactured their GPS receivers to listen in on the same spectrum that the FCC licensed to LightSquared and allocated for mobile wireless operations, not for GPS.

Because of defendants' design decisions, LightSquared said its authorized use of its own licensed spectrum could potentially cause the defendants' GPS products to malfunction.

In addition, LightSquared said the defendants had manufactured and sold hundreds of millions of GPS products with these vulnerabilities at least since 2003, when they entered into their first contractual commitment with LightSquared. According to the defendants, the vulnerabilities made it impossible to recall and retrofit the faulty devices.

LightSquared said in the complaint that it had no reasonable way of knowing about the defendants' design flaws.

Launch blocked

As a result of the defendants' actions, LightSquared said the FCC sought to block the launch of its network in February 2012 by suspending its authority for terrestrial operations.

"This caused lucrative business contracts with LightSquared to be cancelled, multiple prospective business relationships with LightSquared never to be consummated (or, if consummated, never realized), and forced LightSquared to file for bankruptcy in May 2012," the lawsuit said.

LightSquared said the defendants' belated announcement and alleged broken promises prevented the timely launch of a nationwide wireless broadband network and caused it to lose investments and contracts worth billions of dollars.

LightSquared is a Reston, Va.-based wholesale-only 4G-LTE network integrated with satellite coverage. The company filed for bankruptcy on May 14, 2012 in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 11 case number 12-12080.

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