Report: LightSquared might swap airwaves with military

Wireless startup LightSquared might try to swap airwave licenses with similar ones operated by the Defense Department in a last-ditch attempt to save its nationwide network, The Wall Street Journal reports, citing sources familiar with the company's plans.

The Federal Communications Commission (FCC) moved to block LightSquared's plans earlier this week after testing showed its network would interfere with millions of GPS devices. 

LightSquared was planning to operate its network on frequencies adjacent to the GPS band, but tests showed its powerful cell towers would have disrupted sensitive GPS receivers. Satellites, which emit a much fainter signal than cell towers, would be unlikely to interfere with the GPS devices.

Philip Falcone and his invest firm Harbinger Capital have invested billions of dollars in LightSquared.

The company has until mid-March to receive regulatory approval or its risks losing a multibillion-dollar contract with Sprint.

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