LightSquared Faces U.S. Prohibition After Failing To Pay Obama Demanded Bribes

http://www.businessweek.com/news/201...uared-faces-u-
s-prohibition-after-interference-report.html

Feb. 14 (Bloomberg) -- The U.S. Federal Communications
Commission said it won’t let Philip Falcone’s LightSquared Inc.
begin service after an Obama administration adviser found that
the wireless venture disrupts navigation gear.

Federal agencies have determined that LightSquared’s signals
interferes with global-positioning system devices, Tammy Sun, an
FCC spokeswoman, said today in an e-mailed statement. The FCC is
preparing to withdraw the preliminary approval it granted last
year for LightSquared to build a high-speed network serving as
many as 260 million people, Sun said.

“The commission clearly stated from the outset that harmful
interference to GPS would not be permitted,” Sun said. “The
commission will not lift the prohibition on LightSquared.”

The FCC’s action marks a blow to LightSquared and a setback for
Falcone’s Harbinger Capital Partners hedge fund, which has
invested $3 billion in the venture. Last year’s tentative FCC
approval sparked a year of lobbying by LightSquared and opposing
GPS companies, and set in motion U.S. testing that LightSquared
has denounced as flawed.

Those government tests found that LightSquared’s proposed ground-
based network would interfere with navigation equipment
including gear used by aircraft, Lawrence Strickling,
administrator of the National Telecommunications and Information
Administration, said in a letter today to the FCC.

“There are no mitigation strategies that both solve the
interference issues and provide LightSquared with an adequate
commercial network deployment,” Strickling said in the letter to
FCC Chairman Julius Genachowski.

Falcone’s Fund

LightSquared said in an e-mailed release issued before Sun’s
statement that it disagreed with Strickling’s findings.

The NTIA and the advisory board that informed its decision
“disregard more than a decade of regulatory orders, and in doing
so, jeopardize private enterprise, jobs and investment,” the
Reston, Virginia-based company said.

The company’s travails in Washington have weighed on Falcone’s
hedge fund, which in 2005 began investing in LightSquared’s
predecessor, SkyTerra Communications Inc.

Harbinger managed $4 billion at the end of last year, down from
a peak of $26 billion in mid-2008. It wrote down its
LightSquared position by 59 percent last year because of the
uncertainty over LightSquared approval.

Harbinger is paying a 15 percent interest rate for a $190
million loan, almost triple what the riskiest corporate
borrowers pay, said two people with knowledge of the loan.

LightSquared said it “fully expects” the FCC “to recognize
LightSquared’s legal rights to build its $14 billion, privately
financed network.”

The wireless company has pursued FCC approval since November
2010, and cited previous agency decisions that it says granted
permission to build towers for its network.

On 2/14/2012 9:05 PM, Pay To Play wrote:
> http://www.businessweek.com/news/201...uared-faces-u-
> s-prohibition-after-interference-report.html
>
> Feb. 14 (Bloomberg) -- The U.S. Federal Communications
> Commission said it won’t let Philip Falcone’s LightSquared Inc.
> begin service after <FCC, NTIA and industry> found that
> the wireless venture disrupts navigation gear.
>
> Federal agencies have determined that LightSquared’s signals
> interferes with global-positioning system devices, Tammy Sun, an
> FCC spokeswoman, said today in an e-mailed statement. The FCC is
> preparing to withdraw the preliminary approval it granted last
> year for LightSquared to build a high-speed network serving as
> many as 260 million people, Sun said.
>
> “The commission clearly stated from the outset that harmful
> interference to GPS would not be permitted,” Sun said. “The
> commission will not lift the prohibition on LightSquared.”
>
> The FCC’s action marks a blow to LightSquared and a setback for
> Falcone’s Harbinger Capital Partners hedge fund, which has
> invested $3 billion in the venture.


---

FCC To Suspend LightSquared Plans

The FCC will indefinitely suspend LightSquared's authority to carry
terrestrial broadband signals on frequencies close to GPS frequencies
after receiving a report that concludes the two systems cannot currently
coexist. The National Telecommunications and Information Administration
(NTIA) wrote (PDF) the FCC on Tuesday saying there was no immediate
solution to interference problems found in testing GPS units in the
presence of the types of signals that LightSquared is proposing. The FCC
conditionally allowed LightSquared to use frequency bands it owned
adjacent to the GPS bands provided it could prove the broadband wouldn't
step on GPS. A year of testing demonstrated serious and widespread
interference according to NTIA. LightSquared says it "profoundly
disagrees" with those findings and was fighting to have the FCC rule in
its favor right up until the decision was announced. The battle isn't
officially over yet.

According to PC World, the FCC was planning to issue a public notice of
its intentions on Wednesday and will seek public comment on its plan and
the NTIA's conclusions. The NTIA did leave a crack in the door by saying
it would like to work with the FCC and industry to tackle the
interference problems so that spectrum can be freed up to be used for
broadband. LightSquared hasn't said what it intends to do with the
decision which will effectively cancel its plans for a $14 billion high
speed wireless system.