It is adjacent to the GPS frequencies, which are also satellite downlinks.
Satellite transmitters are not too powerful, and when the signals get to earth, they are quite weak. So a satellite downlink in the Lightsquared frequencies would not interfere with GPS operation because the weak signals would be further attenuated by the selective filters in the GPS receivers.
Lightsquared wanted to reuse the frequencies for terrestrial cellular radio telephony. This involved fairly powerful transmitters and signals that are much more powerful than GPS satellite signals at the GPS receivers. Obviously, things vary depending on the siting of the Lightsquared cell stations, Lightsqared antenna gains, distance from the cell site, location of the GPS satellites, attenuation of Lightsquared and GPS signals by weather and atmospheric effects, and by the design of the GPS selective receiver filters.
So it was probably a reasonable gamble on Phil Falcone's part to bet a few billion dollars of hedge fund money on being able to persuade the lawyers running the FCC that they should ignore technical issues and let Lightsquared build a terrestrial radio system using satellite downlink frequencies.
But it ignored the fact that filters are not perfect notches and that the attenuation versus frequency always has some reasonable roll-off in the filter skirts. Further the GPS receiver designers had built a whole pre-existing industry in a regulatory environment that specified that they would only have to guard against weak satellite downlink signals in the adjacent bands.
The FCC should never have entertained the Lightsquared application to reuse the frequencies in the Bush adminstration.