The failure of LightSquared to demonstrate that their product won’t interfere with commercial, military, and aviation GPS may have damaged their bottom line, but it hasn’t dampened their chutzpah.  Now, instead of claiming that they will refrain from interfering with millions of existing GPS units, LightSquared has sent the FCC a petition demanding approval for their system, and telling GPS users to essentially pound sand:

In the company’s most aggressively worded message to the Federal Communications Commission, LightSquared argues that the GPS industry has no right to seek protection from the potential interference that LightSquared’s network could cause. It said today that it has filed a petition seeking a declaratory ruling confirming its rights as a spectrum licensee. The company has been battling the perception that its network could possibly cripple critical GPS devices–hurting planes, farming equipment, and consumer devices.

While LightSquared–backed by hedge fund manager Philip Falcone’s Harbinger Capital–has worked to prove its network isn’t a threat, it has now taken a slightly modified tack: claiming that the GPS industry has been manufacturing devices that bleed into its licensed spectrum.

“The one inescapable conclusion from two rounds of independent testing is that the incompatibility problem is not caused by LightSquared’s network,” said Jeff Carlisle, executive vice president for regulatory affairs and public policy for LightSquared. “It is clear that GPS devices are purposefully designed to look into LightSquared’s licensed spectrum, and given this evidence, we believe decision-makers should consider LightSquared’s legal rights as the licensee.”

Slashgear notes that this is a change in tone from the earlier reaction to the test failures, which was to claim that the test results weren’t actually all that bad or that they were performed incorrectly.  Now, LightSquared just wants what it thinks the FCC owes them:

This past month the folks at LightSuared have had less than an awesome time dealing with the idea that their network had been accused of interfering with GPS receivers of all kinds, and this week after already having sent word out to the world that the whole thing was just a simple misunderstanding, they’ve petitioned the FCC directly to have them affirm their spectrum rights. LightSquared is currently looking into building a new national LTE network using frequencies that sit next to those generally devoted to GPS, and as their petition for declaratory ruling notes this week, they’re living in peace, not bashing each other around. On the other hand, specifically what they’re asking is that the FCC affirm that their rights to use the spectrum outweighs the fact that because GPS receivers are not licensed and do not operate inside service rules, they are not entitled to interference protection.

They note this rather laughable quote from CEO Sanjiv Ahuja:

“This petition goes to the very heart of the FCC’s mission, which is to ensure that the nation’s airwaves are governed by regulatory certainty.”

As Hot Air readers already know, that’s why LightSquared had to apply for the waiver in the first place.  Their license restricts the use of their frequencies to low power satellite communications, not a terrestrial cell-phone network that broadcasts at much higher power levels.  LightSquared didn’t request a waiver for “regulatory certainty,” they requested an exception to regulatory certainty.  And the FCC granted it only under the condition that LightSquared demonstrate that it would not interfere with GPS systems built in accordance with the FCC’s spectrum allocation plan, which LightSquared’s system spectacularly failed to do.

Now that they’re running out of cash, LightSquared wants to take the gloves off.  The petition is basically a shot across the FCC’s bow, warning that the company will sue the FCC to win approval for their rollout.  It’s not much of a threat, since the waiver was clearly conditional, but LightSquared will argue that the FCC’s waiver implied that they could invest heavily in the system in anticipation of approval for the rollout.  Unfortunately, this threat is about the last card LightSquared has in its deck, because without any sense that the FCC will approve their system, LightSquared won’t find new investors, and they’ll eventually go under.

The question will be whether the FCC surrenders to LightSquared — and presumably the White House, which has already interfered with Congressional testimony on the project and has plenty of connections to LightSquared investors.  That will be difficult for FCC chair Julius Genachowski.  The Department of Defense and Department of Transportation has already publicly announced the failure of LightSquared to abide by the terms of the waiver, and the NTIA has stated that no further testing is necessary to make the determination of LightSquared’s status.  On top of that, Genachowski himself assured Sen. Charles Grassley that he would not allow LightSquared to proceed in the event of failure, in a memo dated May 31, 2011:

“As I have stated previously to Congress, the Commission will not permit LightSquared to begin commercial service without first resolving the Commission’s concerns about potential widespread harmful interference to GPS devices.  The FCC International Bureau’s Order of January 26, 2011 (Order) [the waiver — Ed] outlines our interference concerns, and unambiguously conditions LightSquared’s commercial operation on first resolving those issues to our satisfaction.  Under no circumstances would I put at risk our nation’s national defense or public safety.”

Less than two months ago, on October 28, 2011, Genachowski reiterated this position:

“I share your concerns regarding national security, public safety, and good government.  More specifically here, I reiterate to you my previous assurances that the Commission will not make any decisions regarding LightSquared that jeopardize national security, public safety or the important services the GPS industry provides the American public.”

Given that the NTIA, cited as the authority by Genachowski in this letter, determined that up to 75% of those devices failed when the LightSquared system operated, it will be very tricky for the FCC to suddenly find that the LightSquared system didn’t jeopardize all of the above.  That isn’t to say it’s impossible, either, so Congress needs to remain vigilant.