House Democrats push for investigation of bankrupt Open Range's federal loans

Democrats from the House called on Congress to expand its investigation into federal loan programs to include bankrupt WiMAX operator Open Range Communications, which received a loan from the U.S. Department of Agriculture's Rural Utilities Service (RUS) loan program under the Bush administration.

Open Range filed for bankruptcy earlier this month after receiving federal loans totaling $267 million, and the government has issued $74 million of that loan.

Reps. Henry Waxman (D-Calif.), Diana DeGette (D-Colo.) and Edward Markey (D-Mass.) asked the leader of the House Energy and Commerce Committee to include Open Range in its current investigation of federal loan guarantees granted to the bankrupt solar panel firm Solyndra, which collapsed at the same time as Open Range with more than $500 million in loan guarantees from the Energy Department. The Obama administration has been accused of favoring certain energy projects.

"Your reaction to the Open Range bankruptcy could not be more different than your reaction to the Solyndra bankruptcy," the lawmakers said in their letter to Energy and Commerce Committee chairman Rep. Fred Upton (R-Mich.). "Like Solyndra, however, the Open Range loan puts millions of taxpayer dollars at risk."

In its bankruptcy filing, Open Range partly blamed the FCC's move to discontinue a special license it had with Globalstar in September 2010. The FCC had suspended Globalstar's Ancillary Terrestrial Component (ATC) authority because it hadn't complied with the commission's rules. That left its lease partner Open Range without spectrum, which threatened its funding to roll out WiMAX services to rural communities. When the FCC took away the waiver, Open Range said the U.S. Department of Agriculture's Rural Utilities Service (RUS), slashed its original loan and investors fled.

Open Range has service in more than 140 markets spanning more than a dozen states. The company laid off the bulk of its employees and stopped accepting new customers. It is continuing to providing service to existing customers and is looking for a buyer.

For more:
- see this Washington Post article

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