- The Washington Times - Wednesday, February 15, 2012

Reston-based LightSquared Inc. vowed Wednesday to continue its fight to establish a national wireless broadband network, a day after federal regulators ruled its plan posed too great a danger to existing defense, aviation and GPS networks.

After Federal Communications Commission officials made clear late Tuesday that they would not approve the company’s wireless network, LightSquared CEO Sanjiv Ahuja accused the government of bowing to political pressure and said regulators were guilty of trying to “choose winners and losers” rather than let the market decide.

Although the FCC gave tentative approval last year for LightSquared’s plan to build a land-based network that would reach nearly 70 percent of the United States by 2015, the proposal has been controversial from the start, for both technical and commercial reasons. LightSquared officials contend the technical problems - including interference with Defense Department, GPS and other existing satellite signals - were fixable.

“Politicians, rather than engineers and scientists, dictated the solution to the problem from Washington,” Mr. Ahuja said in statement Wednesday afternoon.

“To leave this problem unresolved is the height of bureaucratic irresponsibility and undermines the very principles that once made America the best place in the world to do business. We remain committed to finding a solution and believe that if all the parties have that same level of commitment, a solution can be found.”

More than a year ago, President Obama set a goal to double the amount of commercial broadband wireless spectrum to the country. About the same time, LightSquared received a conditional permit to develop an open wireless broadband network that fit Mr. Obama’s description.

But the move sparked a ferocious political and lobbying battle. Critics said the LightSquared network would wreak havoc with existing satellite signals near it on the spectrum. The company contended the opposition came in part because of the threat the company posed to existing carriers such as AT&T and Verizon Wireless.

The Reston company has spent a reported $4 billion on preparation work for the now-blocked network, much of it assembled by billionaire investor Philip Falcone.

Matters came to a head Tuesday when the Commerce Department’s National Telecommunications and Information Administration told the FCC in a letter it could not find a way to lessen the threat LightSquared’s network would pose to GPS systems. LightSquared’s devices, NTIA officials said, operated too closely to GPS frequencies that caused overbearing transmission interference, according to their own in-house research and studies conducted by the Federal Aviation Administration.

“Substantial federal resources, including over $2 million from the [Federal Aviation Administration], have been expended and diverted from other programs in testing and analyzing LightSquared’s proposals,” Transportation Department Deputy Secretary John Porcari told a House subcommittee last week.

In an interview with The Washington Times late last year, Mr. Ahuja said his company aimed to “fundamentally transform the way in which American consumers get telecommunications services.” Part of that “fundamental transformation” would be to cut cellphone bills by more than a third by acting as a kind of neutral supplier of its wireless network to prospective customers such as electronics retailer Best Buy.

LightSquared employs 350 people at its main headquarters in Virginia and “hundreds and hundreds” of engineers and contractors.

Market reaction to the news of LightSquared’s rejection was swift.

Rival, Clearwire Corp., a 4G mobile broadband service provider out of Bellevue, Wash., saw its market shares rise more than 3 percent Wednesday in the wake of the announcement.

According to Bloomberg News, Sprint Nextel Corp., the country’s third-largest cellphone company, was counting on Lightsquared to provide its wireless Internet access. But because of the FCC ruling, Sprint likely will continue to rely on Clearwire for its services.

Sen. Chuck Grassley, Iowa Republican and a leading skeptic of LightSquared’s proposal, said Wednesday the agency had made the right call, but said the FCC’s attempts to fast-track the application exposed what he called “major accountability gaps.”

“The agency put this project on a fast track for approval with what appears to have been completely inadequate technical research,” Mr. Grassley said in a statement. “After all of this time and expense, still, no one outside of the agency knows why. That’s not the way the people’s government should work.”

LightSquared officials have argued that their signal would interfere with existing networks only because those networks were operating on parts of the wireless spectrum that they did not control.

Jeff Carlisle, LightSquared’s executive vice president for regulatory affairs and public policy, said that GPS in America is “too big to fail,” claiming that industry giants such as Garmin and the Department of Defense are too established to have their position contested. In a company blog post, he blamed them for “selling devices that listen into frequencies outside of their assigned spectrum band - namely into LightSquared’s licensed band.”

LightSquared officials said the company is not going down without a fight, as they have tentatively partnered with 34 companies, including Sprint and Sharp Electronics Corp. The company also may try to exchange wireless licenses it owns for ones now claimed by the Pentagon, according to a report from Dow Jones Newswires.

The company also hasn’t given up hope of changing regulators’ minds.

“Today, we ask the FCC to restore American values of rule of law and regulatory certainty to help America maintain its place as a global leader in both public safety and economic development,” said Mr. Ahuja.

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