LightSquared Witness Predicts FCC Airwave Approval by ‘15

Philip Falcone’s LightSquared Inc. will probably get U.S. regulatory approval to use its wireless spectrum by 2015 and may buy more airwaves, a member of a special committee of the company’s board told a bankruptcy judge.

LightSquared, based in Reston, Virginia, sought bankruptcy protection in 2012 after the Federal Communications Commission blocked the company’s wireless service, saying it might interfere with civilian and military global-positioning-system navigation equipment.

“I believe they will allow the spectrum to be used terrestrially,” Christopher Rogers, a member of a committee specializing in airwave issues, told U.S. Bankruptcy Judge Shelley Chapman in Manhattan today. He was testifying at the outset of what may be a multiday hearing in which LightSquared is seeking final approval of its plan to exit bankruptcy.

Rogers cited two meetings with the FCC in December. The agency also has some airwaves right next to LightSquared’s slice of the spectrum, and the company could make a bid should they go up for auction, Rogers said. The National Oceanic and Atmospheric Administration currently uses some of that spectrum.

Ex-FCC Commissioner

Former FCC Commissioner Robert McDowell testified that he believes 30 megahertz of LightSquared’s spectrum will be approved for use by the end of next year, and an additional 10 megahertz within seven years.

McDowell said that in forming his opinion, he reviewed public information, held discussions with LightSquared executives and drew on his experience making such decisions for the FCC. He said his opinion was current as of today and hasn’t been affected by recent statements from the FCC or changes to the company’s plan.

While the reorganization plan doesn’t require LightSquared to get regulatory approval by a certain date, the repayment of creditors, including Dish Network Corp. Chairman Charles Ergen, could be dependent on the company’s future success.

Ergen had previously offered to buy some of the company’s airwaves for $2.2 billion, only to drop the offer amid a dispute with Falcone, whose Harbinger Capital Partners LLC controls LightSquared.

Under the exit plan, LightSquared would emerge as a standalone company valued at $7.7 billion, with more funding to pursue its ambitions with regulators.

The case is In re LightSquared Inc., 12-bk-12080, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

(Updates with testimony in third paragraph.)
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