LightSquared plans to provide high-speed wireless service nationwide, but tests earlier this year revealed its network interferes with GPS devices.
According to LightSquared, the problem is that GPS receivers are "looking into" LightSquared's spectrum.
To address the interference problem, LightSquared agreed to operate its cell towers on only the lower 10 MHz of its spectrum. But even with this adjustment, its network would still cause problems for some precision GPS devices.
Earlier this month, Air Force Gen. William Shelton told a congressional subcommittee that fixing the interference problem with precision GPS devices would cost billions of dollars and take a decade or more.
But last week, LightSquared claimed to have found a way to cheaply modify precision GPS receivers to fix the interference problem. Its new plan is still undergoing testing.
The GPS industry said LightSquared should pay to retrofit GPS receivers.
“LightSquared is the newcomer trying to change the use of mobile satellite spectrum," a spokeswoman for Coalition to Save Our GPS said. "It’s time for LightSquared to step forward and accept responsibility for providing fully tested, verified solutions, and for bearing the full costs associated with any transition required to implement any solution."
In a letter to the Federal Communications Commission sent Thursday, Sen. Chuck Grassley (R-Iowa) said it is LightSquared's responsibility to pay for retrofitting government GPS devices.
"Though private industry is the engine that drives our economy, and entrepreneurship is a necessary ingredient in our economic recovery, government should not favor selected private companies," he wrote. "This means that if a private company seeks to benefit at the expense of the federal government, that company should, at the very least, compensate the federal government for its expense."
Carlisle said the $50 million the company has committed to paying for retrofitting government devices is expected to cover all of the costs.
In addition to the GPS problems, LightSquared has also run into political obstacles in recent weeks.
Republican lawmakers have called for an investigation of the company's ties to the White House after emails revealed the company had communicated with senior administration aides. Reports said the administration also asked Shelton to change his testimony in a congressional briefing to make it more supportive of the wireless startup.