Interesting theory, I would love to see something like that happening. Nevertheless, there are two main reasons why it is plainly unfeasible under the terms you have described it:

  1. Emission of electromagnetic signals on the GPS L1 frequency (1575.42 MHz) by any party other than the U.S. Department of Defense would be a form of signal jamming that constitutes an offense under the U.S. Telecommunication Act and equivalent regulations in different countries. The mere attempt to plan the operation of such service would get the FCC+FBI guys knocking on their doors with a subpoena for conspiracy against the interests of the Nation.
  2. From my experience on development of mobile operating systems, the hardware abstraction layer (HAL) and radio interface layer (RIL) of both Android and iOS make it impossible for user space software (apps) to make low-level usage of radio devices such as the GPS receiver.
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