By Greg Bensinger Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Philip Falcone's LightSquared may seek to exchange its wireless airwave licenses for similar ones operated by the U.S. Department of Defense, in a last-ditch effort to revive its fourth-generation mobile broadband service, according to people familiar with the company's plans. The possible strategy comes a day after officials from the Federal Communications Commission said they planned to revoke a waiver allowing the network to operate because of interference concerns. LightSquared had been criticized by the Defense Department, legislators and makers of farm equipment and Global Positioning System devices that its network signal operates too close to those used for GPS and could interfere. In comparison, the Defense Department airwaves--used primarily for aircraft testing--operate on a frequency farther away from GPS signals making it less likely to cause any jamming, the people said. Such an airwave swap is among several options the company is considering in response to the FCC action Tuesday, the people said, and LightSquared may ultimately not pursue it. A spokesman for the Reston, Va.-based LightSquared declined to comment on the company's plans. Also, a Defense Department spokeswoman had no immediate comment, and an FCC representative declined to comment. It is unclear which agencies may need to approve such a deal. The move would represent a change in strategy for LightSquared. The company has said it is the victim of incomplete testing and that its proposed network would create thousands of jobs and ease congestion on carriers' services as more Americans buy data-hungry smartphones and tablet computers. Falcone also has invested billions of his Harbinger Capital Partners hedge fund's money in the venture. The matter came to a head on Tuesday when the National Telecommunications and Information Administration, a unit of the Commerce Department, sent a letter to the FCC saying it could find no way to lessen GPS interference from LightSquared. Shortly afterward, the FCC said it would recommend against allowing LightSquared to roll out its network. LightSquared said on Tuesday that it "profoundly disagrees" with testing that showed its network caused GPS interference. LightSquared has argued that the GPS industry should have anticipated any interference and should be required to pay for filters that would block out the company's signal. A Commerce Department spokeswoman said she had no immediate comment. The FCC granted LightSquared a waiver in early 2011 to operate satellite wireless airwaves, or spectrum, for a land-based nationwide network that would reach 260 million Americans by the end of 2015. LightSquared hoped to compete with AT&T Inc. (T), Verizon Wireless and others in selling its spectrum wholesale and had agreements with Best Buy Co. (BBY), Leap Wireless International Inc. (LEAP) and other companies. LightSquared may lose an important partner in Sprint Nextel Corp. (S) if it cannot get FCC approval to operate by mid-March. The two companies reached a 15-year agreement to share network resources and construction expenses that would have saved LightSquared as much as $13 billion through the end of this decade. Sprint had recently given LightSquared two extensions to get approval from the FCC. Sprint may have to return $65 million in prepayments to LightSquared if it fails to meet its latest deadline. Falcone's Harbinger Capital, the primary financial backer of LightSquared, reported the value of its largest fund dipped 47% last year because of a write-down of the value of the wireless company. LightSquared has said it has enough cash on hand to operate for several quarters, without providing specifics. The company faces additional competition from Dish Network Corp. (DISH), which has a pending application with the FCC to also operate satellite spectrum for a terrestrial wireless network. Dish has said it expects the FCC to rule by the end of March, but that it would take several years to build out a network after approval. -By Greg Bensinger, Dow Jones Newswires; 212-416-4676; email@example.com --Amy Schatz contributed to this report.