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In the US, the FAA is planning to discontinue VORs and omnirange stations, the non-satellite navigational aids that have run aerial navigation for decades. The Coast Guard discontinued LORAN C in 2010. This was done with the concurrence of the Department of Homeland Security, which said it was "not needed for GPS backup."

GPS is a very weak signal, and easy to jam. Satellites put out only 500 watts, spread over half the surface of the planet. LORAN C was transmitted at power levels from 100KW to 4MW, with huge antenna farms. That kind of power is difficult to jam at any distance. VORs and omnis aren't as powerful, but they're usually located at airports, so that when you're close to an airport and need to find the runway, the signal is at its strongest.

The spectrum bleeds so there will be interference, though it remains to be seen how much.
Falcone is certainly paying fof his chance to get Light squared going.
http://www.bloomberg.com/news/2011-09-20/house-republicans-ask-white-house-for-records-of-falcone-contact.html
But that's business as usual.

However the claim is that the Lsquared signals are a "billion times greater in strength" than GPS, and I know my modern GPS unit seems to have trouble locking on at times.
http://www.insidegnss.com/node/2498

Lsquared seems like a great opportunity for rural areas to get high-speed Internet and maybe it's time we updated our GPS satellites again, but from my perspective after what I have read from multiple sources I am going to go with Light squared will cause issues with commercial GPS and the motivation on Lsquared's part is being the only provider in the area, charging a higher fee for access, and not having to lay cable and other infrastructure thereby reducing deployment and maintenance cost, in other words a large profit margin, and the only problem is they have to destroy the GPS infrastructure already in place.

Read more of those issues, or read Inside GNSS: this does indeed impact Galileo and it impacts anything within 600 miles of US borders, which means it impacts intercontinental aviation.

In a letter filed yesterday (July 19, 2011), Heinz Zourek, director-general for enterprise and industry, wrote to FCC Chairman Julius Genachowski that if LightSquared is allowed to begin broadcasting in the band, “What are now neighbour MSS [mobile satellite service space-to-Earth] transmissions at similar receive powers to RNSS [radionavigation satellite service such as GPS and Galileo] would in future be many orders of magnitude higher and with the potential to severely disrupt reception of RNSS signals.”

He cited analysis — including ESA studies —carried out in Europe that showed interference effects to Galileo equipment would occur from 100 meters to almost 1,000 kilometers (620 miles), “depending on the type of receiver being used.”

Emphasis mine. Source: "EC Official Adds Galileo, EGNOS Worries to FCC’s LightSquared-GPS Deliberations,"Inside GNSS, July 20, 2011. That's right, July. The Europeans knew this was going to interfere with GPS/Galileo for aviation back in July. They had tested it, and they had numbers showing how far the interference would spread.

I'll leave it to the tin-foil crowd to speculate on why the FCC is only getting around to publishing its findings now. I'd suggest, though, that what they come up with might not be so paranoid after all in this case. Those who want to dig through some glaring evidence of bipartisan corruption will find it without looking too hard into this story, because the shady deals were conducted practically in the open on this one, from the SkyTerra days on through the past week. The Republicans are already working overtime on trying to assemble a timeline of Falcone's dealings with Obama: if the Democrats were smart, they'd have a team doing the same to show Republican connections, because they are there too (SkyTerra got permission for this back in the Bush era).

The fact that this story is dying in the back pages while Lindsey Lohan's Playboy spread and the circus clowns that have hijacked the Republican nomination get near-orgasmic coverage is a sad comment on how useless journalism has become.

Here's an article that describes another reason for the cuts. There does seem to be alot of back and forth regarding this system.

http://www.insidegnss.com/node/1806

Although the Federal Register notice also indicates that a decision has not been made on the need for a GPS backup, the announcement apparently brings to a close a seemingly interminable process of preserving and upgrading the terrestrial radionavigation system to provide an enhanced Loran (eLoran) capability that could serve as a multimodal backup to failures or interference to the Global Positioning System.

That process spanned several years, two administrations, and the expenditure of $160 million over the last 10 years to partially modernize a network of Loran stations that now will be phased out. It also flies in the face of an independent assessment team’s unanimous recommendation to establish eLoran as a GPS backup, as well as the efforts of navigation counterparts in other nations, notably the United Kingdom, to implement eLoran.

Given the limitations of GPS, except for when it's in a garage or building ;)

This is a moot point nowadays, modern navigation GPS units have accelerometers that are precise enough to support a good distance on inertial navigation alone, until they can reacquire a satellite signal.