LightSquared to go dark

Good news for pilots, GPS users and the US military:

The Federal Communications Commission moved on Tuesday to block LightSquared’s planned nationwide wireless network over concerns that it cannot be fixed to coexist with global positioning systems.

The FCC is the final word on whether LightSquared can proceed, unless the company decides to take the issue to court.

The FCC’s decision was prompted by the conclusions of the National Telecommunications and Information Administration (NTIA), which advises the president on telecom issues and formally concluded earlier Tuesday evening that LightSquared’s proposed wireless should not go forward.

The quick reaction seemed to catch LightSquared off guard. Just an hour before the FCC announced its decision, a LightSquared spokesman blasted the NTIA conclusion and said the company “fully expects the [FCC] to recognize LightSquared’s legal rights to build its $14 billion, privately financed network.”

The decision marks a colossal fall from grace for the wireless startup, which has waged a bitter fight over the network for more than a year. LightSquared wants to build a nationwide wholesale wireless network based on satellites and ground transmitters.

LightSquared’s innovative use of spectrum fit nicely with FCC goals to use more spectrum for wireless communication. In its statement on Tuesday the agency said that LightSquared’s plan offered “the potential to unleash new spectrum for mobile broadband and enhance competition.” 

The company planned to operate on spectrum near that used by GPS. When tests showed that LightSquared’s network would overpower GPS transmissions, a coalition of GPS manufacturers and users organized to block the plan.

Federal agencies like the Defense and Transportation departments, which rely on GPS, began to voice their concerns and soon Congress was holding hearings.

The FCC said it will not lift the restrictions on LightSquared’s plan. The commission also proposed to end earlier FCC orders that gave LightSquared authority to build some parts of its network.

“Consequently, the Commission will not lift the prohibition on LightSquared," it added. "A public notice seeking comment on NTIA’s conclusions and on these proposals will be released tomorrow.”

The NTIA has been analyzing tests for months, and on Tuesday the agency told the Federal Communications Commission that it sees no way for LightSquared’s plans to move forward.

“Based on NTIA’s independent evaluation of the testing and analysis performed over the last several months, we conclude that LightSquared’s proposed mobile broadband network will impact GPS services and that there is no practical way to mitigate the potential interference at this time,” NTIA administrator Lawrence Strickling wrote in a letter to FCC Chairman Julius Genachowski.

The Washington Post mentions some graphic predictions for horrific results if LightSquared's plan had been allowed to go forward::

The FCC’s decision is expected to all but end LightSquared’s aspirations to provide mobile broadband services via satellite airwaves -- a plan that was touted from its inception by FCC Chairman Julius Genachowski. Under his tenure, the FCC granted the company a key conditional waiver in January 2011 that was meant to help fast-track the network. The decision has drawn massive protest from the military, John Deere, and weather forecasters who rely on GPS systems. Congressional Republicans have also launched investigations into the FCC’s controversial decision.
On Tuesday, the FCC said its decision was based on a report that day by the National Telecommunications and Information Administration (NTIA). The NTIA said its analysis of tests on the network showed “there is no practical way to mitigate the potential interference at this time” with global positioning devices.
LightSquared on Tuesday said it disagreed with the NTIA’s findings and said the government body used flawed testing data in its analysis.
“LightSquared recognizes, however, that this is just one step in the process, and it remains committed to working toward a resolution,” the company said in a statement.
The company didn’t immediately respond to requests for comments on the FCC decision.
But experts doubt any resolution will be achieved before LightSquared runs out of money and partners, such as Sprint Nextel, decide to turn away from the proposed satellite network that hasn’t yet been built.
LightSquared was created by hedge fund billionaire Philip Falcone’s investment fund, Harbinger Capital, with a commitment of $14 billion. The fund has lost much of its value, according to reports. The firm, which blames GPS devices for interference problems, said it has enough cash for the foreseeable future.
It was a model project — a privately funded business that would carry out Genachowski’s plans to create more competition to giants AT&T and Verizon Wireless.
But the satellite venture struggled with financing as regulatory scrutiny of the network grew. Sen. Charles Grassley (R-Iowa) asked if the FCC was paying special favors to the company and asked for all correspondence between officials and the firm. Genachowski’s office refused, saying Grassley’s Judiciary Subcommittee doesn’t oversee the FCC.
Meanwhile, government aviation and military officials sounded alarms that LightSquared’s network would interfere with everything from landing gear to weather prediction systems. The FAA predicted multiple deaths could occur if the network was launched.

Commentary from Hot Air's Ed Morrissey:

The only model this demonstrates is how Democratic donors got favorable treatment from the Obama administration.  The Post doesn’t mention that Obama was an early investor in a LightSquared predecessor, or how investors had access to the White House, nor how the White House tried to pressure witnesses to Congress to modify testimony favorably toward LightSquared.  None of the reports mention that the FCC could have easily bench-tested this a year ago and found out exactly what we know now, which would have saved LightSquared and taxpayers a lot of time and money.  Grassley’s investigation wants to get to the bottom of all these questions, and so far Genachowski has been stonewalling to prevent it.
Meanwhile, good riddance to LightSquared and its attempt to use political pressure to get a 4G cell network on the cheap at the expense of GPS consumers, commercial aviation, and national security.  It should never have taken this long to come to this conclusion.

Indeed.  But even so, this is an example of government regulation working relatively properly.  Something to keep in mind during all of the upcoming attacks on "government regulation" during the upcoming campaign.