New York HedgeCo.net) – On February 14, 2012, the Federal Communications Commission (FCC) moved to bar LightSquared’s planned national broadband network saying it would interfere with current GPS services.
“From day one, it has been my vision to build a wireless network that increases competition and connectivity that will lower prices for every American.” Philip Falcone, CEO of hedge fund Harbinger Capital said in a statement regarding the ruling, “I made this multi-billion dollar investment in LightSquared in reliance on FCC’s stated conditions for our receiving a license. Today’s Public Notice by the FCC not only disregards this decade old regulatory order but also reverses a policy adopted by Republican leadership in 2005. In doing so, it jeopardizes private enterprise, jobs and telecom investment in America’s future.”
Falcone continued: “What’s more, the FCC’s recent statement contradicts itself. On the one hand it has ordered LightSquared to build a $14 billion wireless system and on the other hand it has told the company that it cannot proceed. This was not a decision based on science or technology but was a politically motivated decision fueled by special interest groups in the GPS and telecom industry. “
“Nevertheless, there are solutions to this problem that can and will address the needs of the GPS community and allow all Americans to enjoy the benefits of new competition in the wireless industry, resulting in lower prices, and innovative service, if rational public policy prevails. ” Falcone concluded.
In 2011, LightSquared announced that it had signed a 15-year agreement with Sprint to build and operate its wireless network. LightSquared planned to help smaller, regional wireless operators compete and provide nationwide 4G service to rural and underserved areas. The hedge fund founder ruled out filing for bankruptcy.
Among the issues being raised is if political contributors and investors received favorable treatment by the Obama administration. Conservative media sources have reported that an Air Force General claimed in a closed congressional hearing that he had received political pressure to soften his testimony regarding the negative effects of LightSquared technology. However, the General’s spokesperson has denied there was any improper influence and said that the General’s testimony was reviewed appropriately by the Office of the Secretary of Defense and other executive agencies via the established OMB (Office of Management and Budget) process.
Editing by Alex Akesson
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