A paper released on Tuesday by the Brattle Group contends that, if the FCC accedes to demands of the GPS industry to bar LightSquared’s proposed use of L-band channels that could interfere with adjacent GPS operations, risk and uncertainty would rise considerably with respect to spectrum valuations across the board, thus reducing the earnings potential of future FCC spectrum auctions. Titled “The Cost of Regulatory Risk for Wireless Spectrum Values,” the paper was compiled at the behest of LightSquared, which continues to fend off GPS industry claims that even the company’s revised plan to commence operations on lower L-band channels that are farther away from GPS will not offer full interference protection to GPS receivers. According to the paper, just a five percent increase in the risk that a spectrum allocation (such as LightSquared’s) could be revoked by the FCC would “reduce expected spectrum [auction] receipts by over ten percent,” which would shave $10 billion in proceeds from auctions of the 500 MHz of spectrum that is targeted by the National Broadband Plan for wireless broadband services. (Industry estimates put the value of that 500 MHz spectrum block at approximately $100 billion.) The paper further outlines two ways in which the “additional regulatory risk of having an allocation revoked reduces the present value” of spectrum. First, the paper notes, “the possibility that cash flows might fall to zero if a spectrum license is revoked decreases the expected cash flow by about the same percentage as the risk of having a license revoked.” Also, the risk of license loss “further increases the cost of debt, and thereby, decreases the present value of future cash flows.” The paper also contends that uncertainty and perceived higher risk resulting from spectrum revocation could bring about investment and construction delays “even for projects that would still be profitable,” which, in turn, “would have ripple effects throughout the economy.” In remarks at a press briefing in Washington, LightSquared executive vice president Jeff Carlisle warned that, if the FCC voids his company’s license as requested by the GPS industry, the “certainty of spectrum rights” would be destroyed, and “for the first time ever, the FCC would be saying you have squatter rights to spectrum simply by creating wide-open [GPS] receivers.”