Kerrisdale Capital is pressing its short campaign against Globalstar, Inc. (NYSEMKT:GSAT) as the company’s share price continues trending down, this time focusing on its experimental-license activity that the hedge fund says show weaknesses in the GSAT’s plans to offer premium Wi-FI through its terrestrial low power service (TLPS), a direct response to the enthusiasm around GSAT’s October 20 application to the FCC to do testing in San Carlos, California to determine the efficacy of TLPS for ‘outdoor small cell use in diverse semi-urban environments’ and ‘latency intolerant/high priority applications’.

Cisco seems indifferent to TLPS

First, Kerrisdale says that some of the recent excitement is based on the notion that Cisco Systems, Inc. (NASDAQ:CSCO) is a partner in the experiment. It’s true that Cisco is using San Carlos as a test case for its Smart+Connected Communities program, and that Globalstar, Inc. (NYSEMKT:GSAT) is using Cisco Aps in its own tests, but the two companies don’t seem to be cooperating (aside from the hardware sales).

Both sides have claimed support from various Cisco Systems, Inc. (NASDAQ:CSCO) statements to support their case, and Kerrisdale points to what it calls ‘biting’ commentary by Cisco to the FCC.

“The benefits promised by Globalstar’s latest business plan pale in comparison to the public benefits that will be achieved as the Commission opens the 5.35-5.47 GHz and 5.85-5.925 GHz bands for Wi-Fi use and allows the potential of IEEE 802.11ac to be fully realized,” says the statement.

In context, it sounds like Cisco Systems, Inc. (NASDAQ:CSCO) doesn’t much care what Globalstar, Inc. (NYSEMKT:GSAT) is up to, as long as it doesn’t interfere with their own plans.

GSAT: Litany of experimental licenses send conflicting messages

More to the point, Kerrisdale Capital points out that Globalstar, Inc. (NYSEMKT:GSAT) has applied for experimental licenses to test its TLPS in ‘a university environment’, ‘a rural transit environment’, ‘a low-density enterprise environment’, ‘a moderate-density suburban single-family home environment’, ‘latency intolerant/high priority applications’ and on and on.

Globalstar License GSAT

You could argue that Globalstar, Inc. (NYSEMKT:GSAT) is just being thorough, trying to get the most out of the spectrum that it owns, but Kerrisdale sees a company floundering for a business plan.

“We can’t blame the market for failing to have a consistent vision of what TLPS would really be, given that Globalstar itself seems deeply uncertain,” says the Kerrisdale report. “Globalstar is searching in vain for a problem TLPS can solve – a problem that matters, with real money to be made – and finding nothing.”