The Justice Department asked the United States Court of Federal Claims on October 28, 2026 to dismiss Ligado Networks’ 50 billion dollar lawsuit, arguing that a Federal Communications Commission spectrum license does not carry the property rights needed to trigger compensation when another federal agency occupies the same airwaves. The filing, led by assistant attorney general Brett Shumate, puts DOJ FCC spectrum license property rights before a judge in a case that could reshape the legal foundation of commercial wireless investment.
The dispute concerns a threshold question that American courts have never conclusively resolved: whether a private company holding an FCC licence acquires a constitutionally protected property interest in the frequencies it is authorised to use. Ligado says the Defense Department has blocked its network by operating undisclosed systems in licensed L-Band frequencies and by supporting legal and legislative barriers to its buildout. The government says spectrum remains a public resource and that a licence merely grants conditional access under federal law.
DOJ FCC spectrum license property rights: What the Government Argues About Spectrum Licences
Shumate’s filing says Ligado cannot establish that the Communications Act gives it the right to exclude non-FCC federal agencies from spectrum covered by its licence. In the government’s comparison, a spectrum licence resembles a fishing licence: it permits an activity in a defined area without giving the holder ownership that prevents the government from changing access to the resource.
The distinction matters because the FCC can modify or revoke a licence under the Communications Act of 1934. The Justice Department argues that this flexibility shows Congress did not intend a licence to create an unrestricted property right. Spectrum is not owned in the same way as land, and the government maintains that public agencies may use it for public purposes without paying a licence holder for every interference or loss of commercial opportunity.
The FCC licences protect a holder against private parties that would otherwise cause interference, according to the filing. Shumate’s position is that those protections do not extend to another federal agency. Federal spectrum use falls under presidential authority and is delegated to the National Telecommunications and Information Administration, an agency within the Department of Commerce. On that view, the FCC cannot compel the Defense Department to vacate a band merely because a private company holds a commercial licence there.
DOJ also points to decisions from the D.C. Circuit, which has addressed FCC licensing law and has held in relevant proceedings that licences are not property against the FCC itself. The government is careful to distinguish that existing doctrine from the narrower question on remand: whether a different federal agency, acting without FCC authority, may take or impair a licence holder’s protected interests without compensation.
Ligado’s Modified L-Band Licence
Ligado, formerly called LightSquared, first went bankrupt in May 2012 and reorganised under its current name in 2016. The company controls 40 megahertz of L-Band spectrum running roughly from 1,525 to 1,660 MHz. Radio waves in this range travel long distances and penetrate cloud, fog and vegetation, making the frequencies useful for satellite services and for terrestrial networks designed to extend connectivity across wide areas.
The portion Ligado holds for satellite downlink, from 1,525 to 1,559 MHz, sits directly beside civilian GPS frequencies from 1,559 to 1,610 MHz. That adjacency produced years of objections from the Defense Department and GPS stakeholders. Their central concern was that out-of-band emissions from terrestrial equipment could degrade navigation signals relied on by military systems, aircraft and precision agriculture.
In April 2020, the FCC unanimously approved a modified Ligado licence for a low-power nationwide terrestrial network. The authorised frequencies were positioned more than 20 megahertz from the GPS band, and power levels were reduced by roughly 99 percent compared with Ligado’s original design. The FCC concluded that the modified plan could operate without causing unacceptable interference. The Pentagon did not accept that conclusion, and the Defense Department continued operating systems in the licensed frequencies while declining to facilitate Ligado’s buildout.
Congress subsequently inserted a provision in the 2021 National Defense Authorization Act that restricts Defense Department contracting with entities engaged in certain terrestrial operations in Ligado’s frequency bands. Ligado alleges that the conflict extends beyond technical interference concerns and reflects the Defense Department’s use of the spectrum for a secret national security programme. That assertion is contested and should not be treated as an established fact. The government disputes both the claimed secrecy and the legal characterization of the Defense Department’s conduct.
Why the Court Sent the Case Back
On November 18, 2024, Senior Judge Edward Damich ruled that Ligado’s licence constitutes property with respect to the Defense Department for purposes of allowing physical, categorical and regulatory takings claims to proceed. The government appealed that interlocutory ruling to the Federal Circuit. At oral arguments in February 2026, a panel consisting of Chief Judge Kimberly Moore, Judge Richard Taranto and Judge Kara Fernandez Stoll questioned the breadth of the parties’ arguments. Chief Judge Moore reportedly predicted that the property-rights question would eventually reach the Supreme Court.
On March 9, 2026, the Federal Circuit affirmed the Claims Court’s jurisdiction under the Tucker Act but vacated the property-rights determination and remanded the case. Judge Taranto said the arguments had been presented at too high a level of generality and lacked sufficient focus on the Communications Act and the particular actions taken under the licence. The panel therefore did not decide that Ligado lacks a property right. It sent the dispute back so the parties could litigate more specific statutory questions.
The October 28 motion follows that remand. DOJ now asks Judge Damich to conclude that the licence is not property and that the court lacks subject-matter jurisdiction. Ligado filed a new complaint in September 2026 that raised its damages estimate to 50 billion dollars from the original 39 billion dollars, citing inflation and expanded losses. The company has pledged to oppose the motion vigorously, and Chief Executive Doug Smith argues that accepting the government’s position would unsettle the spectrum marketplace and deter investment in next-generation communications. Ligado’s damage estimate is the company’s contested claim, not a figure established by the court.
Negotiations reportedly brought the parties close to a settlement during summer 2026, but no agreement was reached. Ligado has also asked the court to proceed to discovery so it could gather evidence about federal use of the spectrum. That process may become necessary if Judge Damich declines to dismiss the case on the current record.
The Commercial and Federal Spectrum Split
The structural problem is that the FCC and NTIA administer different parts of the radio spectrum without a clear statutory mechanism that lets either displace the other’s allocations. The FCC operates under the Communications Act and licenses private parties for commercial use. NTIA manages federal bands used for military radar, air traffic control and government satellite systems. The Interdepartment Radio Advisory Committee helps coordinate the two agencies, but its recommendations do not have binding force.
Ligado’s case turns that gap into a direct conflict. The FCC authorised the company to use particular frequencies for terrestrial service, but the Defense Department continued to operate in the same band. The company says another agency’s use physically displaced its licence and deprived it of the commercial opportunity it had been authorised to pursue. The government says the Defense Department’s federal spectrum authority is independent and that the FCC’s commercial licensing regime cannot give Ligado the practical ability to exclude it.
USTelecom, the leading broadband trade association, took the industry’s position in a Federal Circuit amicus brief filed in October 2025. The group warned that if DOJ’s theory prevailed, any federal agency or other actor could unilaterally usurp a wireless provider’s right to use spectrum without triggering compensation. It said carriers could become less willing to bid at auction. USTelecom did not take a position on every issue in the case, including whether a licence is property against the FCC itself.
Former NTIA Administrator John Kneuer offered a more qualified view during an April 2026 webinar. He said carriers that paid in competitive auctions likely occupy a stronger legal position than Ligado, whose licence resulted from an administrative modification rather than an auction purchase. That distinction could matter as courts consider how much protection different types of spectrum rights receive.
Auction Spending Shows Continued Demand
The legal uncertainty has not yet stopped the market. Wireless carriers have spent more than 230 billion dollars on FCC spectrum auctions since competitive bidding began in 1994, according to USTelecom’s tallies. They have also supported those purchases with more than 700 billion dollars in physical network infrastructure. The FCC’s re-auction of AWS-3 licences earlier in 2026 raised 3.5 billion dollars, with all major carriers participating, while EchoStar is liquidating a portfolio for upward of 40 billion dollars.
Those purchases reflect a practical assumption that licences provide durable rights against interference and encroachments. Auction histories can also give licensees stronger claims than an administrative modification because the government treats the sale proceeds and resulting allocations as evidence of a recognised commercial interest. Yet participation in recent auctions does not resolve whether the Fifth Amendment’s Takings Clause requires compensation when a federal agency occupies licensed airwaves.
Ligado’s financial condition adds another layer of uncertainty. The company entered a second Chapter 11 bankruptcy in January 2025 after defaulting on more than 4 billion dollars in debt. Its Delaware plan was confirmed on September 29, 2025, reducing funded debt from roughly 8.6 billion dollars to about 1.2 billion and organizing the restructuring around a spectrum-sharing agreement with AST SpaceMobile. The two companies came close to settling the federal lawsuit in summer 2026, but those discussions did not produce an agreement.
A Preprint Legal and Investment Framework
This analysis is a working research preprint. It has not been independently replicated, and its market and legal conclusions should be treated as provisional rather than as findings from peer review. The clearest working framework nevertheless separates three questions: what the Communications Act authorizes, what interests a particular licence creates, and what compensation is due if a government actor impairs those interests. The Federal Circuit’s remand places greater emphasis on those distinctions rather than asking only whether spectrum is public property in the abstract.
The immediate question for Judge Damich is whether the Communications Act and Ligado’s licence grant a right to exclude the Defense Department from the relevant frequencies. If they do, DOJ FCC spectrum license property rights may support compensation claims depending on the nature and timing of the alleged taking. If they do not, Ligado’s largest damages theory faces a severe threshold obstacle. The case must also be distinguished from auctions, where carriers pay competitively for defined authorisations and may receive stronger protection than a company operating under later modifications.
No definitive answer is expected before the next major spectrum auction, scheduled to begin in June 2027, according to Blair Levin, a policy adviser at New Street Research. Carriers may continue bidding, and government conflict checks before auctions may preserve workable arrangements in the meantime. But those practices are not judicial guarantees. Until the courts settle the issue, DOJ FCC spectrum license property rights remain an unresolved legal risk beneath billions of dollars in spectrum purchases, network construction and commercial planning.