According to Globalstar's release, the FCC's Office of the Chairman said an order has been circulated in advance of anticipated action from the full commission regarding the authorization of the company's Terrestrial Low-Power Service (TLPS).
What Is TLPS?TLPS is a new type of Wi-Fi service that Globalstar said could get 5 times the distance and 4 times the throughput of public Wi-Fi systems.
Importantly, TLPS would be a private network, owned and operated by Globalstar, which could rent or lease its system to others such as Amazon.com Inc. (NASDAQ:AMZNC), AT&T Inc. (NYSE:TC) or even Apple Inc. (NASDAQ:AAPLC).
Globalstar hasn’t instituted the service because (a) it is controversial and (b), the FCC hasn’t given permission.
The main controversy has to do with interference. TLPS would live in what is known as Wi-Fi Channel 14, which opponents say is too close to Channel 11 and would cause interference.
In addition, Globalstar wants exclusive use of frequency it originally licensed for satellite use, cause many in the industry to complain the company’s tactics were unfair. The same critics that are crying foul also say the technology isn’t proven and won’t do what Globalstar says it will.
Role Of The FCC
The Federal Communications Commission has been “studying” Globalstar’s proposal since 2012. The stock bump came about because Globalstar said it had received a note from the government agency indicating it would act soon.
Globalstar is optimistic the decision will be a favorable one. In a statement, L. Barbee Ponder, Globalstar’s general counsel said, "The Commission's staff has spent a tremendous amount of time and effort on this lengthy proceeding. We look forward to the Commission adopting a final order authorizing Globalstar's TLPS."
Stocks To Watch
As this story unravels, in addition to Globalstar, other companies that could see an impact include the previously mentioned Amazon, AT&T and Apple as well as Alphabet Inc. (NASDAQ:GOOGC) and Microsoft Corp. (NASDAQ:MSFTA), both of which have expressed strong reservations about TLPS.
Microsoft has filed an application for Special Temporary Authority (STA) to conduct testing to determine the efficacy of TLPS and whether it will interfere with everything from Bluetooth hearing aids to general adjacent Wi-Fi transmissions.
ETFs With Exposure
In addition to the stock itself, ETFs with exposure to Globalstar include: iShares US, Fidelity MSCI, Vanguard Telecommunication Services ETF, SPDR S&P Telecom ETF and PowerShares Russell 2000 Equal Weight Portfolio.