Falcone’s LightSquared Needs More Tests, House Panelists Say

Philip Falcone’s LightSquared wireless venture should face more tests of whether it interferes with the U.S. global positioning system before getting regulatory clearance, speakers at a congressional hearing said.

Lawmakers “may request” that the Federal Communications Commission “allow time for full, comprehensive testing” of LightSquared’s proposal announced June 20 to operate on different airwaves than first planned, Representative Tom Petri, a Wisconsin Republican, said today at a hearing of the House aviation subcommittee.

LightSquared “must not interfere with aviation safety” that depends on GPS, said Petri, who chairs the panel.

LightSquared, backed by Falcone’s Harbinger Capital Partners hedge fund, plans to invest $15 billion to serve mobile-Web users over a network of 40,000 base stations, using airwaves previously reserved mainly for satellite services including GPS.

Makers and users of GPS devices say LightSquared may overwhelm their faint signals. Those expressing concern have included General Motors Co., which said its OnStar navigation service was affected during trials.

The House Appropriations Committee today added language to a spending bill to bar regulators from clearing LightSquared for commercial operations until interference concerns are resolved. The amendment was adopted on a voice vote, said a news release distributed by e-mail from the office of Representative Steve Austria, an Ohio Republican who introduced the measure.

Impact on Aviation

Revamping navigation equipment on commercial aircraft to accommodate LightSquared would cost billions of dollars, and halt implementation of a new U.S. air-traffic control system called NextGen that is to use GPS, said Tom Hendricks, a senior vice president with the Air Transport Association.

Congress should prohibit LightSquared from operating its network in a way that interferes with GPS, said Hendricks, whose Washington-based trade group lists members including Delta Air Lines Inc., the biggest U.S. passenger carrier, and United Parcel Service Inc., which flies cargo.

The Federal Communications Commission, which granted preliminary approval to LightSquared in January, has ordered the Reston, Virginia-based company to deliver a report on interference by July 1 before granting final clearance.

A U.S. advisory panel has concluded that LightSquared would degrade global-positioning system navigation devices as far away as outer space and recommended that regulators revoke the tentative approval granted to the company.

LightSquared Changes Plan

To reduce interference, LightSquared will use different airwaves than it had intended, Chief Executive Officer Sanjiv Ahuja said in an interview on June 20. The change would resolve interference concerns for all but a limited number of users such as farm-equipment makers, he said.

The proposed solution would resolve interference problems for 99 percent of GPS users, and the company wants to discuss how it can make use of more airwaves, said Jeff Carlisle, an executive vice president of LightSquared.

“LightSquared has no intention of operating its system in a way that will compromise government or commercial aviation or maritime operations,” Carlisle said.

LightSquared’s original plan “is not compatible” with GPS operation, said Roy Kienitz, undersecretary for policy at the U.S. Transportation Department.

“That doesn’t mean the story is over,” Kienitz said. LightSquared’s alternative “has promise” and “any plan needs to be thoroughly tested before it goes forward,” he said.

‘Catastrophic Effect’

LightSquared’s proposed operations would have a “catastrophic” effect on GPS, and the government should require the company to move to another set of airwaves, said Philip Straub, a vice president with GPS-equipment maker Garmin International Inc.

General Motors’ position hasn’t changed as a result of LightSquared’s June 20 announcement, OnStar spokesman Vijay Iyer said in an interview.

“We still want to keep testing it,” Iyer said. “If there’s new things to test, we want to keep testing them.”

(Updates with spending measure in fifth paragraph.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE