By Dee Ann Divis
A judge will soon hear arguments in a refiled, $6 billion lawsuit alleging Apollo Global Management and others committed fraud by concealing information about the risk of interference to GPS receivers from a proposed wireless network planning to use spectrum adjacent to GPS frequencies.
Harbinger Capital Partners and other plaintiffs first filed the suit in December 2017. Harbinger had invested in, and then fully acquired from Apollo, the firm SkyTerra with a plan to repurpose SkyTerra’s satellite frequencies and use its technology to develop a nationwide ground-based wireless network. The plaintiffs alleged in their 2017 complaint that Apollo and other defendants knew as early as 2001 that SkyTerra’s plan would overload and “be fatal to the millions of GPS devices already in use, many of which are critical to the national infrastructure and already widely used for aviation, safety, defense, and research purposes across the country."
Harbinger had great ambitions when it bought SkyTerra. It renamed the firm LightSquared and invested nearly $2 billion in the effort, including paying another company to clear frequencies intermingled with LightSquared’s so LightSquared could have a contiguous block of spectrum. Harbinger hoped to sell LightSquared’s services wholesale in competition with large national carriers like Verizon and AT&T.
The frequencies licensed to LightSquared were allocated for satellite-to-ground use and neighbored those used by GPS. After LightSquared filed with the Federal Communications Commission in November 2010, and its plan became widely known, the GPS community energetically raised concerns about interference. Subsequent testing made clear the seriousness of the problem. Though the FCC had given LightSquared a conditional waiver early in 2011, thereby allowing it to proceed, it vacated that in February 2012 and LightSquared filed bankruptcy shortly thereafter.
The restructured company emerged from bankruptcy in 2015 and was soon renamed Ligado Networks. Ligado continued to pursue development of a terrestrial network though it agreed to set aside 10 MHz of spectrum to create a guard band between its frequencies and those used by GPS. It also agreed to dial back the power of its signals.
Concerns over interference remained, however, and by early 2020 a broad range of industry interests and more than a dozen federal agencies opposed Ligado’s request to proceed. In a highly controversial decision in April 2020 the FCC approved Ligado’s request to develop its network. The FCC based its decision on a measure of interference different from the criteria it had used up to that point and that was accepted internationally to assess GPS interference.
Though the FCC has not changed its determination, the National Academies of Sciences, Engineering, and Medicine is now conducting an independent review of the commission’s decision at the direction of Congress. There are also half a dozen Petitions for Reconsideration pending before the FCC and both the House and Senate are considering the RETAIN GPS and Satellite Communications Act of 2021, which would require Ligado to pay to address GPS interference for anyone affected.
According to the plaintiffs, the facts that sparked the lawsuit only came to light after LightSquared emerged from bankruptcy.
Harbinger said it had relied on information from Apollo and its board when it decided to invest in SkyTerra and back its effort to create a new telecommunications network. In the course of the initial fight to win approval for the plan LightSquared had sued a number of GPS firms. Harbinger had believed that the GPS companies were to blame for concealing the overload issue but its suspicions were aroused by the way LightSquared handled those lawsuits after bankruptcy.
“The Harbinger Funds were able to discover the truth,” they wrote in the 2017 complaint, “only after the Company, having just emerged from bankruptcy, suddenly dropped a lawsuit that it had brought against a number of GPS companies concerning the interference issue -- a lawsuit it had previously touted as meritorious and valuable – and settled it on such unfavorable terms that they suspected that the issue might not be blamed on the GPS companies.”
Harbinger started digging and discovered that SkyTerra had done extensive testing years earlier. The tests revealed that sending data and voice signals over a network using SkyTerra’s frequencies in the manner planned would cause “overload” interference with receivers used by GPS.
The plaintiffs, however, chose to discontinue the suit and it was dismissed without prejudice in June 2019. Over the course of the year that followed, the complaint was updated and then filed again in June 2020. The current lawsuit includes new defendants Harbinger said it discovered as it investigated and more causes of action. There is also a bump up in the amount of money sought from nearly $4 billion in the original suit to more than $6 billion in the new complaint. As in 2017, Harbinger asked for a jury trial.
A hearing is now set for February 15 in the New York Supreme Court where the judge will consider motions to dismiss the case. With billions of dollars at stake and eyebrow-raising allegations, the case could garner attention for issues surrounding GPS — but what does it mean for the ongoing controversy between GPS users and Ligado?
The current Ligado/GPS controversy and the Harbinger vs. Apollo lawsuit share more than history. The lawsuit was cited in a filing to the FCC docket before the April 2020 decision and in a Petition for Reconsideration submitted to the FCC afterwards.
That said, it is unclear what could emerge from the lawsuit that would impact the questions surrounding the 2020 Ligado decision. More than a decade has passed since LightSquared’s 2010 filing galvanized the GPS community over fears of widespread receiver overload. The network that LightSquared initially proposed is also different from what Ligado is now seeking to build.
Those who spoke with Navigation Outlook about the Harbinger case agreed that the FCC was unlikely to see the ongoing legal action as a reason to change its mind about its Ligado decision
Ligado Networks declined to comment for this story.
Receiver technology has also changed, noted Tim Farrar of TMF Associates, an expert on satellite communications.
The lawsuit goes to the heart of the interference issue as it stood 15 years ago, Farrar told Navigation Outlook. “I don't think it's the same set of devices out there today as it was 15 years ago,” he said. “So, I think that this is not necessarily going to sway the FCC or anyone else one way or another.”
While new GPS receivers might be better equipped to deal with interference, concerns remain about the vulnerability of older receivers that are already installed — and that might be where the case of Harbinger vs. Apollo has an impact.
There are millions of imbedded GPS receivers, said a GPS expert, who spoke on background to be able to discuss the matter. Some of those receivers may be integrated into critical infrastructure and many don’t get updated frequently like cell phones do, the expert said.
There is bipartisan support in both houses for the RETAIN GPS and Satellite Communications Act of 2021, which would require Ligado to bear all the costs of interference, not just the cost of interference to federal government receivers as mandated by the FCC. Any increased interest in protecting GPS receivers sparked by the lawsuit could further strengthen support for the bill.
“I think to the degree that those issues boil up again,” said the expert, “I would imagine that policy makers — they'll sign on to the RETAIN Act and beyond.”