Philip Falcone’s LightSquared Inc. (SKYT) today told the U.S. Federal Communications Commission it can’t legally block the company’s proposed wireless service, calling the agency’s proposal to do so “astounding.”
Opponents of the venture disagreed, and called on the FCC to “act quickly” to withdraw approvals because there’s no practical way to ease interference from LightSquared’s signals.
Both sides were reacting to the FCC’s vow last month to block LightSquared after the Obama administration found the wireless service would disrupt navigation gear using the global- positioning system.
LightSquared in a filing to the FCC said it has invested more than $4 billion as it seeks to build a high-speed data network for as many as 260 million users. The company has relied on a legal framework established by the agency almost seven years ago, the company said in the filing, according to a summary it distributed by e-mail today.
“We are not going away,” Jeff Carlisle, an executive vice president, said today in a conference call. “We’re in the process of revising our business plan to extend our financial runway, to continue to move forward over a period of quarters and years.”
At issue are plans to let Reston, Virginia-based LightSquared operate a network of ground-based towers over airwaves previously reserved mainly for satellites. Users and makers of GPS gear say the network would cause interference. LightSquared says GPS device makers have produced defective equipment that improperly captures its signals.
The government “has relied upon flawed and biased tests,” LightSquared said in its FCC filing, according to the summary. “No scientifically valid evidence exists that even 1 percent of GPS receivers would experience adverse performance consequences as a result of LightSquared’s operations.”
Makers and users of GPS equipment said in a filing today that tests showed LightSquared will cause harmful interference, and the agency should revoke decisions to let LightSquared operate a ground-based network.
“There is overwhelming evidence of interference to critical government GPS-based systems, including those used in defense and aviation applications,” the Coalition to Save Our GPS said in its filing distributed by e-mail. “The FCC must act to prevent any potential interference with those systems.”
Sprint Walks Away
Members of the organization formed to oppose LightSquared include package shippers FedEx Corp. (FDX) and United Parcel Service Inc., GPS-unit maker Garmin Ltd. (GRMN), Delta Air Lines Inc. and Southwest Airlines Co., and farm-equipment maker Deere & Co. (DE)
Sprint Nextel Corp. (S) said today it canceled an agreement to help build LightSquared’s network, adding to concern about the new venture’s viability and the fate of Falcone’s $3 billion investment in the business through his Harbinger Capital Partners (SKYT) hedge fund.
LightSquared has hired litigators as it gears up for a possible legal battle with regulators.
Tammy Sun, an FCC spokeswoman, didn’t reply to a telephone call and e-mail seeking comment.
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.
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