Sept. 21 (Bloomberg) -- The Federal Communications Commission said it initially approved Philip Falcone’s LightSquared Inc. without knowing the wireless service would interfere with global positioning system signals, because GPS-gear makers didn’t complain.
“The FCC would have investigated any interference issues as soon as they were raised,” Julius Knapp, chief of the agency’s Office of Engineering and Technology, said in testimony at a U.S. House hearing today.
The FCC halted LightSquared once it was told by manufacturers and users of navigation devices that LightSquared’s wireless phones would interfere with GPS, Knapp said. “The commission acted responsibly,” he said.
LightSquared in January 2011 got a tentative go-ahead from the FCC for its planned wireless network. The agency changed course and proposed in February 2012 to block the service. Reston, Virginia-based LightSquared, backed by $3 billion from Falcone’s Harbinger Capital Partners hedge fund, filed for bankruptcy in May.
The January 2011 decision followed a brief public comment period, Representative Michael Burgess, a Texas Republican, said at the hearing by the House Energy and Commerce Committee’s subcommittee on oversight and investigations.
“A decision was made in haste,” Burgess said.
Issues before the committee include whether the FCC adequately considered issues involving satellite and GPS interests, according to a committee memo posted on the panel’s website.
“We must not permit regulatory uncertainty at the FCC to deter companies from investments,” said the subcommittee’s chairman, Representative Cliff Stearns, a Florida Republican.
“This investigation has revealed a regulatory review process working as it should,” said Representative Diana Degette, a Colorado Democrat. “We have the FCC weighing the pros and cons, and making a very difficult decision.”
LightSquared can’t deploy its service while the FCC decides whether to revoke initial approvals, as it proposed doing in February and hasn’t yet done, according to the agency’s written testimony submitted to the subcommittee. The written testimony was attributed to Knapp and Mindel De La Torre, who heads the FCC’s International Bureau.
The interference problem stems from some GPS devices using airwaves that aren’t assigned to navigation equipment, according to the FCC’s written testimony. It isn’t the result of LightSquared operating in spectrum assigned to GPS, the agency said in its testimony.
“The commission relies on receiver manufacturers and service providers to report interference issues,” the FCC said in its written testimony. “The GPS industry did not do so until very late in the proceeding. Once the commission received that information, it acted quickly to prevent any public safety problems.”
Jim Kirkland, general counsel of GPS-gear maker Trimble Navigation Ltd., in an e-mail called the FCC’s testimony “deeply misguided and wrong.”
“Once the FCC initiated these proceedings, the GPS industry promptly raised the interference issues,” Kirkland said.
LightSquared had no comment, Michael Tucker, a spokesman, said in an interview.
The phone network would disrupt safety equipment that uses GPS to help keep airliners from crashing, U.S. defense and transportation officials said last year.
The company in FCC filings has said it continues to work to solve the interference issue, and that the agency shouldn’t revoke its permits.
Harbinger’s assets peaked at $26 billion in 2008 after a successful bet on the housing market and have slipped to about $3 billion. Falcone is being sued by the U.S. Securities and Exchange Commission over alleged improper loans from the fund.
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