If the FCC doesn't let LightSquared build its network, the agency will be breaching its agreement with the carrier and violating its constitutional rights, according to LightSquared.

The proposed FCC action would "strip away the approval it granted and leave LightSquared and its investors holding the bag for billions of dollars of losses," the filing said. That could violate their constitutional right to due process under the law, Carlisle said.

It's hard to predict whether LightSquared's fight will end up in court or win the company permission to build a network, but the FCC has landed in a difficult position, according to Maury Mechanick, an attorney at White & Case and a former executive of satellite provider Comsat. The agency is not only seeking to vacate a conditional waiver issued to LightSquared last year, it also wants to indefinitely suspend the company's authority to build an ATC (ancillary terrestrial component) network.

LightSquared's ATC authority was granted several years ago after a process that gave GPS vendors and other opponents a full opportunity to object to the idea of a national, land-based cellular network, Mechanick said. Though a full-scale cellular network may not have been envisioned at that time, it was allowed under the ATC rules, Mechanick said. If the FCC rescinds LightSquared's ATC authority after having gone through the full process, LightSquared might be able to argue that the agency acted capriciously, he said.

The Coalition to Save Our GPS, the main opponent of LightSquared's plan, also filed a lengthy document on Friday commenting on the FCC's plans. The industry group said the agency should act as soon as possible. The FCC has the authority to revisit its past decisions in light of new evidence, and the tests of LightSquared's network last year showed that any significant use of its band may cause harmful interference to GPS, the Coalition said.