LightSquared's deal with Sprint further falters

If the Federal Communications Commission suspending LightSquared's initial approval waiver yesterday weren't enough, the fledgling wireless network was dealt another blow today. Its deal with Sprint Nextel may fizzle.

Sprint said it would have to return $65 million to LightSquared if the wireless venture failed to get FCC authorization by a mid-March deadline, according to The Wall Street Journal. Sprint set this deadline last month with the announcement that if LightSquared doesn't get FCC approval by mid-March then the carrier would terminate its agreement with the company.

Last July, in a 15-year arrangement to push 4G, LightSquared partnered with Sprint in a network-sharing deal and agreed to pay $9 billion in cash and $4.5 billion in credits for LTE access and satellite equipment. In exchange, Sprint agreed to host LightSquared's spectrum, provide network services, and give LightSquared roaming access to Sprint's 3G network.

Now, with the FCC saying it would indefinitely suspend LightSquared's effort to build a national wireless broadband network because of unavoidable GPS interference, the wireless network is left scrambling.

LightSquared said yesterday that it "remains committed to finding a resolution with the federal government and the GPS industry to resolve all remaining concerns."

The FCC's decision is open to public comment and can be appealed.