Sprint Forgives and Forgets LightSquared's Deadlines

You can call Sprint Nextel (NYS: S) a lot of things, but whatever your favorite adjective may be, you have to admit that the company is forgiving.

Not when your phone bill is late, of course. That one is non-negotiable. No, I'm talking about the deadlines Sprint set for prospective partner LightSquared.

The original deal gave LightSquared a New Year's deadline to get FCC approval for its hybrid satellite and tower data network. But the company came under heavy fire from the GPS industry as devices from Garmin (NAS: GRMN) , TomTom, Trimble Navigation (NAS: TRMB) , and every GPS-equipped smartphone might run into interference from the neighboring LightSquared radio spectrum.

So Sprint extended that deadline by a month at the start of January, and has now given the network another six weeks to prove that it can get that crucial approval.

It's no surprise to see Sprint's forgiving side shining through. This is a massive $9 billion contract, meant to relieve Sprint of its exclusive reliance on Clearwire (NAS: CLWR) for next-generation data networking and keep the company's service offerings within shouting distance of industry giants AT&T and Verizon.

Sprint CEO Dan Hesse just wants everybody to get along: "As a provider of GPS services ourselves, we want the issue to be resolved," he said when the LightSquared agreement was unveiled. Garmin and Trimble seem more interested in keeping the status quo. Clearwire investors camp on that side of the fence, too, as the company could be marginalized when LightSquared moves in.

LightSquared says the FCC tests have been rigged against it, at least partly because executives from the GPS industry played a part in the first round of interference experiments. Asking everybody from consumers and airlines to emergency response teams and the military to upgrade their GPS receivers seems politically impossible, so Sprint and friends need to prove beyond a shadow of a doubt that the new network won't break anything.

If it works, the innovative satellite component could turn Sprint into a rural-market powerhouse. None of the other majors have anything like 4G coverage in the badlands of Nebraska or the mountains of Wyoming. 4G LTE is a big-city technology so far. This could be a game changer, so expect Sprint's lenient deadline to stretch until they break. In the meantime, check out three surefire winners in the mobile space that don't really care whether LightSquared lives or dies.

At the time thisarticle was published Fool contributor Anders Bylund holds no position in any of the companies mentioned. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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