Study shows interference with GPS poses threat to U.S. economy

WASHINGTON, D.C. — More than 3.3 million U.S. jobs in agriculture and industries that rely heavily on Global Positioning System (GPS) technology and the disruption of interference with GPS posed by LightSquared’s planned deployment of 40,000 ground stations threatens direct economic costs of up to $96 billion to U.S. commercial GPS users and manufacturers, according to an economic study released June 22.

The study by Dr. Nam D. Pham of the Washington, D.C.-based NDP Consulting Group warns of “serious economic repercussions for the U.S. economy” if LightSquared’s plans proceed and points out that the $96 billion economic figure represents the equivalent of 0.7% of the U.S. economy. The $96 billion figure is the total of up to $87.2 billion in costs to commercial GPS users and up to $8.8 billion in costs to commercial GPS manufacturers, the study noted.

The study states that the commercial adoption of GPS continues to grow and is expected to annually create $122.4 billion in benefits and grow to directly affect more than 5.8 million jobs in the downstream commercial GPS-intensive industries. The study makes clear that its analysis is confined to the economic benefits of GPS technology to commercial GPS users and GPS manufacturers, mainly high precision GPS users, and the economic costs of GPS signal degradation to only those sectors. The report therefore does not capture the benefits and costs to consumer users of GPS, other non-commercial users and military users, according to officials with the new group, the Coalition to Save Our GPS.

The analysis shows that GPS equipment revenues in North America in the 2005-2010 time period averaged $33.5 billion per year and that commercial sales accounted for 25% of the total, while the consumer and military markets respectively made up 59% and 16% of the total. The report notes that the U.S. government has already invested $35 billion in taxpayer money in the GPS satellite constellation and continues to invest in GPS at a rate of about $1 billion a year.

Referring to LightSquared’s plans, the report states, “The commercial stakes are high. The downstream industries that rely on professional and high precision GPS technology for their own business operations would face serious disruption to their operations should interference occur, and U.S. leadership and innovation would suffer.”

The analysis and views in the study, which was commissioned by the Coalition to Save Our GPS, are solely those of the author, Dr. Pham, a managing partner of NDP Consulting Group who was formerly a Scudder Kemper Investments vice president, chief economist of the Asia region for Standard & Poor’s DRI and World Bank economist.

Jim Kirkland, vice president and general counsel of Trimble, who is also a spokesman for the coalition, said: “This analysis highlights the massive economic benefits of GPS technology to the U.S. economy and adds a critical perspective to the current debate over LightSquared’s plans. This study also highlights how LightSquared’s recently announced ‘solution’ to the interference problem, which LightSquared admits will not reduce interference for high precision GPS uses, is no solution at all. High precision GPS uses represent nearly $10 billion in historical investment by GPS users over the last five years and $30 billion in annual economic benefits.”

The solution Kirkland refers to is LightSquared’s plan to shift to another spectrum that is further away from GPS for its 4G LTE network. Since the FCC granted LightSquared a condition waiver for the project, opponents to the plan have been very vocal, saying the interference to GPS could have deadly consequences. That opposition resulted in the Coalition to Save Our GPS . The full report is available here