Harbinger Capital's proposed "LightSquared" Long Term Evolution mobile wholesale network – while still needing to raise significant new funding – has contributed about $2.9 billion, secured additional debt and equity financing of up to $1.75 billion, but needs to raise much more.

The firm says it will hire Nokia Siemens (News - Alert) Networks to operate the network, as part of an eight-year, $7 billion deal.

LightSquared illustrates several trends in the communication business. The first is the outsourcing of core network operations, something telco managers might have considered so mission critical it must be conducted by "in house" personnel.

Increasingly, that is not necessarily the case. Sprint Nextel (News - Alert), for example, has similarly outsourced the operations of its mobile network facilities, to focus its attention elsewhere.

The other angle is the willingness on the part of the U.S. Federal Communications Commission to allow such major "repurposing" of the satellite spectrum for terrestrial use.

The proposed repurposing of satellite spectrum for terrestrial use is relatively rare, but the FCC (News - Alert) seems wireless broadband to be the main way it can spur construction of networks capable of providing 100 Mbps service to 100 million U.S. homes by 2020 or so.

The final observation is the apparent willingness to use a national backhaul method that has some demonstrated advantages and some demonstrated weaknesses. Satellite backhaul routinely is used for distribution of entertainment video, to support retail transaction processes and for distance learning in the United States. In highly-rural areas, mostly outside the United States and Europe, satellites also are used for mobile telephone backhaul.

But satellite is optimized for point-to-multipoint bandwidth efficiency, not point-to-point efficiency. Nor, because of the distances signals have to travel to the repeater sites does satellite offer low latency performance. And network designers constantly striving for network robustness will worry about relying on a national single point of failure.

Harginger seems not to have spoken about in any detail about the proposed use of satellites for backhaul. Any radio frequency engineer, knowing he or she must build a high-speed data network quickly, and on a continental scale, will appreciate satellite's advantages there. Those same engineers might have different opinions, though, if told the new network also must feature low-latency connections supporting real-time data services, interactive video and voice.

The physical issue with satellites is propagation delay, which adds latency, which interferes with real-time services. The other issue is network robustness. If Harbinger uses satellite for backhaul, that will create just a couple massive points of failure for the network, namely the satellites and their transponders.

Presumably there will be satellite spares put into orbit as well, but to the degree that single points of failure are to be minimized as part of the design process, the birds will be an issue. Perhaps Harbinger has some other plan in mind for backhaul.

But right now, that seems the most-troublesome part of the proposal: using a high-latency backhaul in a world that increasingly requires low latency performance. Perhaps LightSquared has some other answer, such as tying the terrestrial radio sites into a national fiberoptic network. So far it has suggested it will use satellite for backhaul.

If there is a deal breaker here, it would seem that is it.