During a recent hearing, members of the House Small Business Committee questioned LightSquared Inc. executives about the company's plan to build “the nation's first wholesale-only, mobile broadband network.”

A growing number of Congressional members have questioned LightSquared's proposed network, arguing that it could interfere with global positioning system (GPS) signals.

Recent test results have confirmed that use of the company's upper 10 MHz block of spectrum — not the lower block, which LightSquared now proposes to use for initial rollout of its network — interfered with GPS receivers used by the Coast Guard, NASA and the Federal Aviation Administration, and caused GPS receivers used by state police, fire, and ambulance crews to lose reception.

“This alarmed many small businesses as they could be required to replace or retrofit their current GPS device,” said Rep. Graves (R-Mo.), the committee’s chairman, in his opening statement at the hearing. “This will be an enormous cost to small businesses. Even though LightSquared has committed to spend $50 million to retrofit federal GPS devices, this does nothing for the nearly one million small businesses that are left to pay the bill that will easily cost billions of dollars.”

The company, for its part, has agreed to further reduce transmission power levels and underwrite the development of new filtering technologies to avoid interference with GPS.

When questioned, LightSquared's executive vice-president of regulatory affairs, said that “it shouldn't cost a cent” for small businesses that must retrofit high-precision GPS receivers to filter out the interference.