Mon 04/13/2020 14:31 PM
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Speaking at a conference in February, Attorney General William Barr said Ligado’s L-band proposal was “interesting” and that it was “imperative” the Federal Communications Commission rule on it. “The bottom line is that we have to move decisively to auction the C-band and bring resolution on the L-band,” Barr said at the time. Subsequent developments indicate that Barr’s intervention into spectrum matters was not a one-off or random occurrence but instead may have been an early sign of a radically shifted approval process that has now put the attorney general at the center of a newly modified “Team Telecom.”

First, the framework for the C-band spectrum clearing and auction process has since been finalized by the FCC.

In addition, AG Barr’s statements have been revisited by the market recently when on April 4, as previously reported by Reorg, President Donald Trump signed an executive order establishing the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Services Sector. The new committee will review applications for telecommunications, submarine cable landing and other FCC licenses that the FCC refers for review of national security and law enforcement concerns.

The committee restructures the manner in which reviews by Team Telecom - an interagency federal working group that oversees telecommunications as it relates to national security - are handled by the FCC including the addition of a “shot clock” mechanism and a direct chain of command from the White House on all national security related issues. The attorney general was named chair of the committee.

The Ligado application with the FCC was originally filed in June 2011, prior to the bankruptcy that created Ligado from what was formerly LightSquared. The application asks the FCC to allow the company’s L-band spectrum holdings to be repurposed for 5G applications. Ligado holds 40 MHz of L-band spectrum between 1500 and 17000 MHz, which would be a premium spectrum band for 5G applications. The bulk of the current 5G spectrum inventory resides between 600 MHz and 2.5 GHz. While there are some applications for higher-band spectrum, applications such as high-band small cell require expensive and speculative technology for deployment. In contrast, L-band spectrum can be deployed using current telecommunications technology.

The use of L-band spectrum for 5G applications has received significant pushback from the Department of Defense, because L-band spectrum is currently used for military GPS applications. In the review of the Ligado application, the FCC has received significant pushback against the repurposing of Ligado spectrum. Most notably, the Department of Commerce division responsible for telecommunications development, the National Telecommunications and Information Administration, issued a letter against the application in December 2019.

Typically, a letter from NTIA would hold significant sway against an application, and the application would be unlikely to be approved. However, the executive order establishing the new Team Telecom is designed to address the specific issue at hand with the Ligado application. The executive order is designed to make the committee the sole decision-maker for national security issues relating to telecommunications, which makes the NTIA letter against the application non-authoritative. The order is also designed to expedite the approval process for telecommunications applications that have been held up on national security concerns. This would definitely describe the 11-year delay Ligado has experienced.

Ligado’s application is thus more likely to receive a friendly approval process given the structural changes that have come to Team Telecom, the appointment of AG Barr to the committee chairmanship, and his past statements in favor of the Ligado application. Sources have noted that Communications Daily recently reported that an order approving Ligado’s sought modifications was expected to go into circulation shortly.

Ligado’s first lien term loan was quoted today at 68/71; its second lien term loan was quoted at 32/36.

Ligado did not immediately return a request for comment. The FCC and the Office of the U.S. Attorney General likewise did not immediately return requests for comment.

--Nils Tracy and Conor Skelding
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