US wholesale carrier LightSquared’s proposed mobile network does cause interfere with local GPS signals, a US government agency has confirmed. The news comes as a blow to LightSquared, which is hoping to be a disruptive force in US telecoms space by offering a country-wide LTE network on a wholesale basis for third-parties to run services over.

The tests, conducted by the National PNT Engineering Forum, a US federal advisory body, showed that some GPS receivers in the area lost signal strength, while others were knocked out completely. The information was revealed by Deane Bunce, co-chair of the National PNT Engineering Forum speaking at a federal government advisory group hearing.

The tests, conducted in May, showed that General Motors’ OnStar GPS system saw a “significant degradation of service”.

Meanwhile, other tests have also shown GPS interference problems, with Deere & Co., a construction company, reporting that its GPS systems were affected by a LightSquared network located some 20 miles away.

The problem arises from the fact that LightSquared’s spectrum is close to that used by GPS receivers, while its base stations are relatively powerful. The tests will provide ammunition for those in the GPS industry who do not want the FCC to approve LightSquared’s network.

LightSquared confirmed that its systems could cause problems for some GPS devices, but claimed that adding filters to antennas could avoid issues. “We believe we can deploy in a way where we can co-exist” Jeffrey Carlisle, LightSquared’s executive vice president of regulatory affairs and public policy said in response to the tests findings. However, it is not clear who would pay for these measures to be implemented.

In the UK, a similar issue has been identified by the regulatory body Ofcom, with LTE base stations potentially clashing with terrestrial TV broadcasts. The proposal here is that filters attached to set-top boxes and adjusting antennas will solve the problem, with Ofcom suggesting that the costs be borne by the LTE spectrum auction winners.

LightSquared’s main investor is Harbinger Capital Partners, a hedge fund led by Philip Falcone, and nearly $3bn has been invested so far.