Bankrupt wireless firm probe kept closed

Claims against feds confidential

A wireless company that went bankrupt owing taxpayers more than $70 million secured a court order Monday to keep under wraps an investigation into whether it has “viable claims” against the federal government.

The order comes as Open Range Communications, which won a $267 million loan guarantee in 2008, tells customers to find other Internet providers. A prospective buyer pulled out of a deal to buy the company earlier this month, clearing the way for liquidation plans.

Open Range has discontinued operations,” the company posted on its website recently. “Please seek another Internet service provider NOW.”

The message is a far cry from the promise hailed by the company and government officials alike when the U.S. Department of Agriculture (USDA) announced a record loan guarantee package for Open Range late in the Bush administration.

Plans called for the company to provide broadband service to more than 500 rural communities in 17 states. Out of the $267 million loan guarantee, the USDA released $78 million to Open Range. The company repaid just $4.5 million before filing for bankruptcy in October.

On Monday, U.S. Bankruptcy Court Judge Kevin J. Carey approved an order to keep confidential details of an investigation into whether Open Range had any viable claims against, among others, the USDA’s Rural Utility Service and the Federal Communications Commission (FCC).

Last year, the FCC denied a request from a satellite provider called Globalstar that had partnered with Open Range. Among the reasons the company cited for its collapse, Open Range noted the FCC ruling in its bankruptcy petition.

After the company’s bankruptcy, Justin DeJong, a spokesman for the USDA, said the department had restructured the loan to minimize exposure to taxpayers in April 2011.

He also said the USDA would be working with the Justice Department to “protect the federal government’s interest in the loan.”

The judge’s order came in response to a motion days earlier from a bankruptcy attorney for Open Range, who had asked for a protective order because the investigation involved “certain confidential documents,” including trade secrets, customer and supplier lists, and pricing information.

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