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>> a one hour interview with sanjiv ahuja, the ceo of lightsquared, a company that is trying to build a wireless broadband network across the u.s. mr. ahuja discusses the science, engineering, cost and political challenges of building the network. as well as concerns that lightsquared's technology may it with gps global positioning equipment. >> sanjiv ahuja is the chairman and ceo of a company called lightsquared. mr. ahuja, what is lightsquared and what do you do? >> guest: thanks for inviting me to the show. cecilia, thank you very much for being here, and good morning to both of you. what lightsquared is trying to do is gain nationwide industrial broadband network, working with

our satellite. that will enable americans coast-to-coast for the first time every square inch of american soil will be able to be connected, whether it is hawaii, alaska, california, maine, the florida. if you can look at the american sky, you can talk on a phone. and for the first time, americans will have access to conductivity, even if there are natural disasters and other things happening through our satellite network. we are building a network which is going to be the most comprehensive network, using fourth generation technology built to date your but complemented with a satellite we launched last year it is the largest commercial satellite ever. so whether you're in yellowstone

national park, grand canyon, or appalachian trail, you're connected. >> host: are you operational right now? >> guest: cannot get to our satellite is operational. we're in the process of moving customers over to the satellite. >> host: who are your customers? >> guest: our customers are retailers. we don't go directly to the consumer. we go to of the company's that take our service and offered to consumers. to date, we have signed 17 customers. so think of it from a consumer perspective. these 17 companies when we are operational and can offer nationwide wireless conductivity to american consumers. so today when you look for a nationwide service, and you have three, maybe four choices.

we have enabled 17 companies to get into that business. part of those are national carriers today. sprint, for instance, tournament is a customer? >> guest: is a customer. also others. but 15 of the companies, we've made them, enable them to be national carriers. because they are reselling our service to american consumers. that is something that has never happened anywhere in the world. not in the united states. not anywhere in the world. we really give so many more choices to the consumers. instead of having very limited few choices, you have, we expect that number could be as high as, close to 100. more competition, more choices and lower prices. >> host: your competitors would be the verizon and at&t's and the comcast? >> guest: we look at these as

co-partners, as sprint is, or potential partners. because what we are providing for them is wireless broadband capacity. so at&t, verizon or comcast, and verizon specifically. if any capacity in new york or washington, how many times do you call today? how many times does your data connection dropped today? it is because there is congestion in the network. there's capacity shortage. we can supplement that capacity for either at&t or all. so we look at these companies, either as customers or as our potential customers. because what the industry is lacking is capacity. a few years ago when we started building the plan for this, we

would anticipate the industry will grow 30, 40 times, over the next six, seven years. today i look at it, it will grow more than 50 times in the next four years. and i think if we look at six months and a year from now, our forecast would be even faster than that. so the demand is growing much faster than anybody anticipated. supply is limited, and we believe that we help augment that supply very significantly. so all of these companies are either current partners or potential partners. >> host: recently lightsquared took out full-page ads in several major publications including "the wall street journal," "the new york times," et cetera, and in that ad you wrote recently concerns have been raised about interference with the lightsquared product with gps devices. what are those concerns and who raised them?

>> guest: let me step back and walk you through the history of lightsquared and the spectrum that we are using today. this companies predecessor was bought in 1980s, and the spectrum of that would be 1989. that's the time when there were no auction and companies were going and getting the spectrum as they need them. a lot of the current large wireless operators came in existence at a time. this spectrum was originally allocated for satellite purposes. it worked in early 2000, 2001, 2003, 2005 under republican administrations, getting permission from the fcc to did enter to rescue network, working in conjunction with the satellite network. that time gps manufacturers participated in the process and

supported the process. and they make comments on our network design. we talked about how we would live as good neighbors, because gps spectrum is like lightsquared spectrum. we designed rules that lightsquared would not transmit into the gps spectrum. that required us to make investment that we would build a big wall on our side that we would not transmit through. and 2010 when we were asking for a change of control when we acquired the predecessor company to lightsquared, called sky terra, the fcc mandated us to build a network at the rate no company in the history of united states, no telecom company, has ever been required.

we are required and mandated by the fcc to cover 260 million americans through our terrestrial network by end of 2015. very aggressive schedule. and very, very aggressive buildout schedule. that's technically a challenge but we stepped up to. we were excited because we really believe it is a great opportunity, and you get to serve the american people that are being charged more than people in other parts of the world, that are getting better quality. that leaves a lot to be decided. and we see it, i dated a man is not getting filled properly. this site has a good option so we accepted those conditions. in fall of 2010, we went to the fcc and asked for a change in the kind of device we would have. now, the devices we rebuilding

until that time would have both satellite and other coverage. one of our large customers said that can offer a service where you have a device, as well as a device that is both terrestrial and satellite. they essentially want to say we will do a piece of to our customers and said we'll connect you to the satellite but most of the time to just a terrestrial network. at that time gps industry stepped up and said we are concerned because you are adjacent to our network. the issue was not we were transmitting into the gps spectrum. issue was gps devices looking over into our spectrum. now, what happened was we were building a network which is one adjacent to gps. we actually moved down to the lower part of the spectrum. so we are very far away.

so it's like you're constructing a building. we have a piece of land and the gps has a piece of land and they say well, if you build close to us, you know, we are looking into it, we have trees, so we went farthest away from the spectrum. and that actually alleviated around 400 gps devices in this country, your cell phones, your personal navigation devices in your cars. most of those problems went away. cell phones are not affected, personal navigation devices are not affected when we moved to the other end of the spectrum. there is, out of 400 million, around 500,000 devices, somewhere between three-700,000. have the money devices that are used for three specific applications, agriculture, large

tractors, construction and serving that were impacted by us being in that part of the spectrum. and we have always believed, and i believe very passionately that this is an ancient problem that good engineers can solve interference. i've been in this business over 30 years. i've build wireless networks in three dozen countries. i've had interference every single time i've tried to build a network. i built one from india to bangladesh to kenya to uganda to rwanda, tanzania, to united states. every time we build a network there is interference, and the way you resolve interference is through internally. and last thing, i said this is an integral challenge and we resolved that. and now last week what we

announced was a device that helps solve the problem for agricultural devices, surveying and construction devices. so we can now live harmoniously with our neighbors in gps, and have fourth networks because ultimately the goal is and the objective is how does the american consumer, how do you, how do i, how do our friends, our family came from the lightsquared network? it is not about one or the other. it is about both living harmoniously. and if you put a technical challenge to american consumer, they can solve it. i confidently believe that, and i believe it today because we have demonstrated it that they can solve these internal challenges. so now we're in a situation that here is the proof it can be done. now let's work harmoniously. let's work to that plan to

replace or we fit these devices that are out there so the farmers are not hurt. because farmers are asking, if you go to kansas, a pharmacist yes, i need that precision navigational device, but i also want broadband. i want my children to do their homework while they are connected to the internet. they don't say, give me this or that. they say give me both. and that's our responsibility. >> host: sanjiv ahuja is the chairman and ceo of lightsquared. cecilia kang is our guest reported with the "washington post." >> even if there is an engineer in solution, a technical solution to these interference problems and you have to do more testing of some portion of those devices, of course, the federal government has asked about the, and the fcc, what about the cost? i know you have committed at lightsquared more than $100 billion come is that right, to defray some of these cost that would have been for some of

these solutions, the filters, et cetera? the federal government i believe, general shelton has even mentioned other federal government officials that it could be in the billions of dollars, that the federal government would have to incur. is a big discrepancy in the dollar figures here, and the costs of how to resolve this technical problem. can you talk about that and what that does been for the future, to live harmoniously, if you have such a huge gulf of dollar figures how can you get someplace in the middle? >> guest: cecelia, a few months ago we were hearing that it would take 10 years to solve this problem technically. it took us less than 10 weeks to demonstrate that the problem can be solved. it is not as hard as what some of the people might believe. our estimate is that the federal

government has somewhere between 30,000-50,000 of these receivers. we have offered to the federal government $50 million worth of either replacement, and we fitting, or refurbishment of existing receivers that the federal government uses. we believe that is sufficient amount of money to replace most of the receivers, or fix most of the receivers that are out there. we obviously don't have recites numbers of data out of federal government to see how many receivers that they have today. when i think about our department of defense systems, i have absolute confidence that these are resilient systems. that these are the systems that can handle transmissions, not just about band, but hopefully

from within the gps band. because you're going today and you can get a gps camera for $20. i'm confident we are building defense systems that can handle things you can buy off the shelf at an electronics shop, or off ebay today that are transmitting within the gps frequency. and we are so far from the gps frequency. i think once we go through the testing and that frequency, we haven't gone through the testing it. so some of the information you might fear, might be based on old information. i think once the new testing happens, i am absolutely confident that we in this country have robust and resilient dod systems. as an american citizen i want to

make sure. >> i will say, i believe some of these federal officials are concerned the american people would have to incur the costs, that would be beyond what you're willing to commit. and why should the federal government is the question? idly senator grassley will send a letter, is sending a letter today asking the fcc and your company of the cost that this would incur to the federal government and to taxpayers. i think that's the concern is why should a private company, why should americans take over the cost of resolving a problem for a private company? >> guest: so let's think about it. i'm not -- i can't speak to what the letter might say, okay? what i can speak to is look, we have made what we think is a very adequate offer for the federal government.

it's a $300 solution for a device to put this filter on those devices that precision can work properly with them. and i think it takes care of most, if not all, of the federal devices that we are aware. now, if there are more, information hasn't been shed. let's talk about consumer devices. and if we look at consumer devices, since 2001, 2002 and 2003, 2005, some of these commercial device manufacturers, all of them have been aware that there is going to be network in the spectrum. >> but do they believe that they would be terrestrial only devices on the network? >> guest: it has nothing to do with interference to the interference is all about what we transmit out of our base

stations. devices have no fiscal impact on gps because every one of the devices that we have in our network, we expect them to be gps enabled. so it really has nothing to do with the devices. it is all about what we transmit from our base station. and that information has been there, some other public filings of the gps manufacturers talk about this happening, and the impact that would potentially have on their business. so, having this capability and is resilient to the device would have cost a few cents, if it was done properly at that time. now, they think devices over several years that are not conforming to how good neighbors ought to be living is fairly disappointing. and i think, you know, that's

the situation we are in. and i will take that if i am buying a product that the manufacture of the product, if i look at it, my personal advantage point, manufacture of the product knew very well that there's a potential network coming in the neighborhood of that, because it's been allocated, it has been allowed, fcc has specifically specified the specifications of how that network would look like. i would make sure that the devices i make working. 400 million plus of those devices work fine. your iphone, your blackberry, your personal navigation system, they all work okay. so i think in the context of this you have to look at what you americans want. and i look around the country, they want broadband, just like

they want their gps. when i go and talk to farmers in kansas, they are saying don't give me precision gps or broadband. they say if we both. you talk to tanzania just before we started this. let me give you an example. i was talking to a friend of mine. she was our anne hathaway from any city in tanzania -- our anne hathaway from tanzania. she was visiting her parents our anne hathaway from atlanta, georgia. she has zero bars on her phone. and in that town in atlanta outside atlanta, in georgia the residents of that town, every afternoon, one of them tries with the blackberries, and iphones to go down. once a day. that's what americans are asking for protesting give us both.

we have a solution that gives them both. >> without a doubt your plan, your business plan is completely parallel in lockstep with what this government wants in terms of broadband. the obama administration, the fcc are calling for this. you mentioned earlier that fcc mandated you to do the biggest terrestrial broadband outreach ever, covering 260 million people. in retrospect, it's been a tough few months for lightsquared in terms of a lot of the political come of the politics around the process in which your company was sort of off the ground in the regulatory come with a regular process as well. do you in retrospect, do you wish that maybe, or do you think that the fcc could have cast a broader and bigger process, do

you think it merited a full commission vote, aside from the 2010 license transfer you referring to, 2011 is they've come to think these things happen and some say has, i need i say was a fast, but you think it merited more tension given the weight of this project and mandated as the biggest project ever for the fcc as you said, should have been for all five commissioners to look at? >> guest: let's go back to 2006. this company started building a network in 2005. >> but there was no mandate for 260 million. >> guest: it had the authorization to build out the network in 2005. okay? so the network builder, the company had the financial capability to do it, so let's for a minute ignored 2010. you can go back to 2005 when we

had a republican administration. the company had authorization to build a network. if it had financial wherewithal you would have had the network operational for several years already. okay, probably wouldn't have built the base that we're planning to build an we are being asked to build, but the network would have been there. so it is not a question of what happened in 2010 or 2011, you have to go back 2003 and 2005 processes, and, obviously, we believe that the fcc processes, for ntia, fcc process with the government agencies participating, industry participating, all of that process happened before the change of controls. but i think it's more important to say okay, what happened in 2005, what happened in 2003, because when we acquired the company in 2010, we acquired it

on the basis of what authorization it had in 2005. and there we moved on to change of control in 2010. >> so i guess i'm asking to do you wish there was more of a thorough process that was brought up to the level by all five commissioners? if that was the case, regardless of what happened in 2005 today because it's such an important work, an important plan to both the fcc and, of course, potentially to the country, that maybe you wouldn't be in the situation today of all these concerns about new testing and new solutions and politics around the hearings and capitol hill. in retrospect do you think that yes, there might've been a process that started in 2005 but nobody really thought that there would be ltv's allusion in 2010 today, and the grand, the reach of it. >> guest: the process, the

participation from department of commerce, ntia, department, it had support and review and participation by all industry players at the time of change of control. that process took several mont months. so is not done in a week or two for a few. it to several months of fcc process. now, it is disappointing that some of the people that have concerns today didn't think about those in 2003, 2005, and second half of 2009 as the process was going on. we have been asked to do the most extensive testing. i'm comfortable of doing the testing. interference issues our internal issues. we should let engineers solve those and they're working on solving those. they have sold most of the issues and put behind the issues behind us.

my other question is, what happens when the network gets out there? it is not anymore technically can't be done. we have worked their technical challenges. i have been saying for months now that these are technical into the issues that should be sold and dealt with by engineers. i have had and continue to have absolute confidence in the engineering capabilities in this country. i was trained as an engineer in the united states. i know how good the talent is. as i said, i have solve interference issues since the early days of the wireless industry. >> host: in a sense, you tell me if this is wrong, but it sounds in a sense that you're saying trust me to the american public, to the faa, to the fcc. >> guest: but i think his trust the american engineers. trust the american ingenuity. when we could put a man on the

moon, our engineers designed the systems to do it. win for last 20 years from the first network on, we have solve interference issues. they have solved this one. it is not. what i'm saying is it is sold. it is, our solution is out there today. we announced it last week that how can you solve precision engineering issues. but i'm also saying americans are saying, cut my terrace, give me broadband coverage, have my children the right access to them over the internet. give me a network that works inside buildings. americans are asking for all that and i'm saying, let's trust the american engineers to provide all of the. >> host: time for one more question. >> well, what next? are you going to meet your deadlines? are you going to meet the timeline given these testing mandates and the fcc?