LightSquared files for bankruptcy after plans for network are dashed

[WestVirginiaRebel]

The Hill:

LightSquared, the wireless startup that has run into opposition from federal regulators, filed for Chapter 11 bankruptcy on Monday.

Philip Falcone and his investment firm Harbinger Capital invested billions of dollars in LightSquared's plan to build a high-speed wireless network that would have served more than 260 million people, but federal regulators denied it permission to launch earlier this year.

In a statement, Marc Montagner, the company's chief financial officer, said the filing "is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network."

The Federal Communications Commission (FCC) had granted the company a conditional waiver to move forward in 2011, but the agency moved to block the network earlier this year after tests showed it would interfere with critical GPS devices, including those used by airplane pilots.

The agency determined there was no "practical way" to solve the interference problem.

In its bankruptcy filing, LightSquared identified its biggest creditors as Boeing, which it owes $7.5 million, and Alcatel-Lucent, which it owes $7.3 million.

The company also owes thousands of dollars to public relations firm Burson-Marsteller and the lobbying group Mehlman Capitol Strategies, according to the Chapter 11 filing.

Testing showed that LightSquared's signal did not bleed into the GPS band. Instead, the problem was that GPS receivers were too sensitive to filter out LightSquared's powerful cell towers operating on nearby frequencies.

LightSquared argued that it was the GPS industry's responsibility to build receivers that only listened to their own designated frequencies, but GPS companies argued that LightSquared was trying to build a cellphone network relying on frequencies that should only be used by satellites, which transmit much fainter signals.

Some Republicans have questioned why the FCC allowed LightSquared to get as far as it did in the regulatory process. They have suggested the company may have benefitted from political connections at the FCC and the White House.

Republicans on the House Energy and Commerce Committee have launched an investigation into the FCC's review of LightSquared.

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Lights out for Lightsquared.