Companies intent on creating new, nationwide wireless broadband systems have their work cut out for them. Upstart LightSquared recently won FCC approval for its network, despite interference problems with high-precision GPS receivers. Part of the solution was the development of filters which can be applied to affected GPS devices. The fix won’t come cheap, though. The filters range from $6 to $300 per device, and patching every affected receiver could cost up to $400 million. Even if LightSquared doesn’t have to chip in, the company still faces an uphill battle. It hopes to sell wholesale access to its network rather that deal with consumers directly, and the company faces “terrible economics,” according to professor of management and strategy Shane Greenstein.
Meanwhile, Clearwire had been attacking the nationwide wireless broadband problem from the retail side. They backed away from their retail strategy back in February, and stores have been closing in its wake (including the one in downtown Evanston). Now, the Wall Street Journal is reporting the company is considering skipping its December 1 debt payment, which at $237 million could drain the company of around one-third its liquidity. Shares of the stock dropped steeply following the announcement, which could allow Sprint to buy out the remainder of the company on the cheap (Sprint is both Clearwire’s majority owner and largest customer).