A company planning to build a nationwide high-speed broadband network has admitted its plans would affect the performance of 200,000 GPS devices in the US.

LightSquared’s idea is to put together a network of both cellphone towers and satellites to offer LTE nationwide. It wouldn’t deal directly with consumers but rather would sell access on a wholesale basis to wireless companies.

The big problem is that the spectrum LightSquared plans to operate in is close to the spectrum used for GPS satellite signals. The GPS industry previously complained that this could cause widespread problems, claiming the disruption to signals would not only pose a safety threat, but could cost the country $96 billion and 3.3 million jobs. (Contrastingly, LightSquared claims its network would bring a $120 billion economic benefit to the public.)

The Federal Communications Commission, which would regulate the LightSquared network, asked the company to make its case on the issue for a FCC technical working group report that was formally presented to the FCC this week.

Although the report hasn’t been published, the company says it’s found a solution that would avoid interference for 99.5 percent of GPS devices, including all cellphones. As far as LightSquared is concerned, the fault now lies with the GPS for not fitting filters to recently manufactured devices, which it claims would only have cost five cents per device.

The company is looking at the 0.5 percent of devices still under threat as a small rather than big issue, arguing that “It is unthinkable that a nation which recently completed a complex digital-television transition involving nearly every household in the U.S. will be stymied by a problem posed by approximately 200,000 GPS devices.”

Not surprisingly the GPS industry disagrees. The “coalition” of industry members opposing the network says that “The FCC technical working group report conclusively shows that LightSquared’s proposed operations defy the law of physics, and therefore simply will not work…. we have frighteningly little idea of the magnitude of the consequences of interference, other than it will be truly extraordinary in scale. To tamper with these systems based on technical guesswork would be a mistake of monumental proportions”