- 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.

Story Continues →