LightSquared hires high-flying lawyers for potential fight with FCC

LightSquared has hired prominent lawyers Theodore Olson, a former U.S. solicitor general, and Eugene Scalia, a son of Supreme Court Justice Antonin Scalia, in a signal that it may try and fight the FCC in court. The FCC last month concluded that LightSquared could not launch its proposed network because concerns over interference between the company's network and GPS receivers could not be mitigated.

Olson said he is getting involved so that LightSquared's multibillion-dollar investment in its network isn't wasted. Harbinger Capital Partners, Philip Falcone's hedge fund that is backing LightSquared, has poured $3 billion into the company. Olson told Politico that LightSquared is "an egregious example" of the government pushing a company to invest to meet a national priority--in this case expanding mobile broadband access--and then "pulling the rug out from under them capriciously and precipitously. On the face of things, it looks to me like the government has acted arbitrarily after inducing the expenditure of an enormous number of resources."

The National Telecommunications and Information Administration concluded that after evaluating the results of testing into interference between GPS receivers and LightSquared's L-band spectrum, "there is no practical way to mitigate the potential interference at this time." In January 2011, the FCC granted LightSquared a conditional waiver to allow its wholesale customers to offer terrestrial-only service, but that waiver was conditioned on all GPS interference concerns being resolved before LightSquared could launch service. Shortly after the NTIA's conclusions were released, the FCC said it would not lift the prohibition on LightSquared commencing terrestrial service.

An FCC spokeswoman did not immediately respond to a request for comment.

The hiring of the lawyers "doesn't preclude other options," Jeff Carlisle, LightSquared's executive vice president of regulatory affairs and public policy, told Bloomberg. "But their decision to not allow us to go forward isn't supported by the law or technical policy. We are confident about that and we are eager to prove our case."

LightSquared executives and officials have blasted the tests that the NTIA evaluated, and said they were rigged to be biased against LightSquared. Additionally, LightSquared has contended that GPS device makers are at fault for interference caused between LightSquared's L-band spectrum and GPS receivers, and that LightSquared, a licensed spectrum holder, should be allowed to launch commercial service. LightSquared's efforts were vigorously opposed by a group called the Coalition to Save Our GPS. The coalition's members include GPS makers Garmin and Trimble, as well as the likes of Caterpillar and John Deere & Co.

Meanwhile, reports have indicated that Sprint Nextel (NYSE:S) may decide to terminate its network-hosting agreement with LightSquared as soon as this week.

For more:
- see this Bloomberg article
- see this Politico article
- see The Hill article

Related Articles:
Report: Sprint may end deal with LightSquared next week
Report: LightSquared eyes former Nextel chief Donahue for CEO spot
LightSquared's Ahuja jumps ship, company remains committed to network buildout
Report: LightSquared to cut 45% of staff
LightSquared may pursue spectrum swap, claims political foul play
LightSquared's proposed network should be shelved, regulators find

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