March 13 (Bloomberg) -- Billionaire Philip Falcone’s LightSquared Inc. hired litigators Theodore Olson and Eugene Scalia of Gibson Dunn & Crutcher LLP as it gears up for a possible legal battle with U.S. regulators.
The wireless venture, facing a regulatory rejection for its business plan, is seeking to make sure it doesn’t lose its multibillion-dollar investment due to the government’s decision, Olson, a former U.S. solicitor general, said today in an e-mailed statement.
LightSquared is struggling to survive in the wake of the Federal Communications Commission’s decision to block the service because of potential signal interference with global-positioning systems. Falcone, through his hedge fund Harbinger Capital Partners, has invested about $3 billion in the venture, and now may have bought one of the best legal teams available, said Lawrence Kaplan, a lawyer with Paul Hastings in Washington.
“Olson’s one of the sharpest minds in the legal world,” Kaplan said. “You can’t go much higher.”
Olson, 71, served as President George W. Bush’s solicitor general, arguing on the White House’s behalf at the Supreme Court from 2001 to 2004. He also represented couples challenging California’s 2008 Proposition 8 same-sex marriage ban.
“Even though I disagree with him on many things, he’s a deity,” Kaplan said of Olson.
Scalia, the other lawyer hired by LightSquared, is the son of Supreme Court Justice Antonin Scalia and he brings some of his own skills at fighting government decisions. Scalia, 48, has had four straight victories toppling federal policies on behalf of corporate clients at the U.S. Court of Appeals for the Federal Circuit in Washington.
The FCC in January 2011 granted LightSquared partial approval of Falcone’s plan to convert satellite-only airwaves for use in a terrestrial wireless service. The FCC said the company couldn’t begin commercial service until it resolved concern that the network would disrupt GPS devices.
Just over a year later, Feb. 14, the FCC grounded Lightsquared’s venture after tests found that the proposed ground-based network would interfere with navigation equipment including gear used by aircraft, according to the National Telecommunications and Information Administration, a Commerce Department division that helps oversee use of airwaves and advises the FCC.
While LightSquared vowed to seek a solution, it also said in January the tests were rigged to produce “bogus results.”
Tammy Sun, an FCC spokeswoman, didn’t reply to an e-mail and telephone call seeking comment.
The hiring of lawyers “doesn’t preclude other options,” Jeff Carlisle, LightSquared’s executive vice president of regulatory affairs and public policy, said today in a telephone interview. “But their decision to not allow us to go forward isn’t supported by the law or technical policy. We are confident about that and we are eager to prove our case.”
LightSquared was opposed by the Coalition to Save Our GPS, a group that includes package shippers FedEx Corp. and United Parcel Service Inc., GPS-unit maker Garmin Ltd., Delta Air Lines Inc. and Southwest Airlines Co., and farm-gear maker Deere & Co.
“We will do all we can to ensure that LightSquared does not lose billions of dollars in investments due to a precipitous, arbitrary reversal by the government,” Olson said in the statement.
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