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Falcone, LightSquared Say Interference With GPS Can Be Solved

Hedge fund billionaire Philip Falcone said his LightSquared Inc. venture remains committed to finding a solution to interference problems that led U.S. regulators to reject the proposed nationwide wireless service.

The U.S. Federal Communications Commission yesterday vowed to block LightSquared after the Obama administration found the wireless service’s signals would disrupt navigation gear that depends on the global-positioning system. The FCC said it plans to withdraw the preliminary approval it granted to the Reston, Virginia-based company last year.

“This was not a decision based on science or technology but was a politically motivated decision fueled by special interest groups in the GPS and telecom industry,” Falcone said in an e-mailed statement today. “There are solutions to this problem that can and will address the needs of the GPS community.”

In an earlier statement, LightSquared Chief Executive Officer Sanjiv Ahuja said the FCC “changed its mind” after granting approvals to LightSquared.

“There can be no more devastating blow to private industry and confidence in the consistency of the FCC’s decision-making process,” Ahuja said.

The FCC didn’t change its stance, Tammy Sun, an FCC spokeswoman, said in an interview.

“The commission has clearly stated from the outset that harmful interference would not be permitted,” Sun said. “That’s why the conditional waiver issued by the commission’s international bureau prohibited LightSquared from beginning commercial operation unless harmful interference issues were resolved.”

The FCC’s action marks a blow to LightSquared and a setback for Falcone’s Harbinger Capital Partners (SKYT) hedge fund, which has invested $3 billion in the venture. It follows a yearlong lobbying fight between LightSquared and opposing GPS companies that featured a series of government tests denounced by LightSquared as flawed.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net

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