LightSquared Responds to FCC

Press Release by Issuing Company

Thursday, February 16th, 2012

Officials with telecommunications company LightSquared and its majority owner Harbinger Capital Partners lashed out at the Federal Communications Commission's decision to call off the company's plans to provide wireless service in rural America, saying the FCC made its decision based on politics.

LightSquared Chairman and Chief Executive Officer Sanjiv Ahuja and Harbinger Capital CEO Philip Falcone said the FCC decision was not based on science, in statements released to the media.

The FCC ruled Tuesday that potential interference with GPS units was too much to overcome to make the network feasible in rural areas.

Though rural areas are in need of wireless service, agriculture groups and farm equipment companies have opposed the project based on concerns that the LightSquared signal could interfere with GPS-based precision-agriculture systems.

Interference concerns were verified by tests performed last year, according to a letter to the FCC Tuesday from the National Telecommunications and Information Administration.

Tests were conducted last year on 92 personal/general navigation GPS receivers compared to earlier tests on just 29 receivers, NTIA Assistant Secretary for Communications and Information Lawrence E. Strickling said in a letter to the FCC Tuesday. The test found 69 of the devices were "impacted by the lower 10 MHz base station signal" as proposed by LightSquared.

"Typically, when America has faced a challenge, the private and public sectors join together to help solve these problems to better serve this country," Ahuja said in a statement. "Unfortunately, with its action yesterday, the FCC has harmed not only LightSquared but also the American public by making it impossible to build out a system that would meet public policy goals of successive administrations.

"It is not surprising that, as with all innovative new technologies, scientific concerns became an issue. In this case, the government decided to choose winners and losers. Politicians, rather than engineers and scientists, dictated the solution to the problem from Washington.

"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."

Ahuja said the company will continue to search for a solution and "believe that if all the parties have that same level of commitment, a solution can be found."

The FCC approved LightSquared to build its ground network in 2005.

In 2010, the FCC amended the plan to require the company to build a national broadband network that reached 260 million Americans.

"At the government's mandate, LightSquared began investing billions of dollars in America's infrastructure without asking for any money from the American taxpayer," Ahuja said. "Yesterday, after LightSquared had already spent nearly $4 billion, the FCC changed its mind. There can be no more devastating blow to private industry and confidence in the consistency of the FCC's decision-making process."

Falcone said in a statement that his company made a "multi-billion-dollar" investment in LightSquared based on "reliance on FCC's stated conditions for our receiving a license."

The FCC's recent action "contradicts itself," he said.

"On the one hand it has ordered LightSquared to build a $14 billion wireless system and on the other hand it has told the company that it cannot proceed," Falcone said. "This was not a decision based on science or technology but was a politically motivated decision fueled by special interest groups in the GPS and telecom industry."

He said there are solutions "that can and will address the needs of the GPS community and allow all Americans to enjoy the benefits of new competition in the wireless industry, resulting in lower prices, and innovative service, if rational public policy prevails."

Todd Neeley can be reached at todd.neeley@telventdtn.com

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