The problem with their spectrum was twofold
Firstly it was licensed for use by satellites, where any signal would be of a similar order of magnitude to GPS signals. Lightsquared wanted to use earth based base stations, which could and would swamp nearby GPS receivers.
Secondly it was rather close to the GPS band anyway. They tried things like promising not to use part of the bandwidth nearest to GPS for a number of years while GPS receivers with better signal rejection were developed, but improving that would reduce sensitivity. Not good for navigation.
All in all the basic concept was flawed.