US operator Sprint Nextel has again extended the deadline for the proposed US wholesale LTE operator LightSquared to secure regulatory approval, reports Dow Jones Newswires.

Clearance by the Federal Communications Commission (FCC) is a condition of a 15-year spectrum and equipment sharing deal between the two companies. Sprint previously extended the deadline by 30 days from the original 31 December target.

LightSquared now has until the middle of March to satisfy the FCC that its network won’t interfere with critical GPS services.

The Space-Based Positioning, Navigation and Timing (PNT) national executive committee – made up of nine federal agencies that coordinate and advise the US government on GPS issues – wrote a letter to the US Commerce Department saying the network would interfere with GPS services and that it saw no way in which the issue could be fixed quickly.

LightSquared subsequently put out a statement questioning the validity of the test results saying they were “rigged” by GPS device manufacturers and government end users to produce “bogus results.”

The company called on the National Telecommunications and Information Administration (NTIA) to objectively re-evaluate the tests and evaluate mitigation proposals put forward by LightSquared. It has also asked the FCC and NTIA to conduct a second round of independent tests to ensure objectivity and transparency.

In order to mitigate the GPS interference issue, LightSquared last year outlined a plan to reduce the power of its base station transmitters and use a 10Mhz block of spectrum lower in the spectrum band than first proposed.

Financial documents seen by Reuters in December suggested LightSquared could run out of money by the second quarter of 2012 unless it can raise new capital. LightSquared is heavily backed by Philip Falcone's Harbinger Capital Partners hedge fund, which has reportedly pumped over US$3 billion in equity and loan commitments into the venture to date. Activist invest Carl Icahn was recently reported to have purchased US$300 million of LightSquared's debt.