LightSquared CEO Ahuja Resigns, Company Still Seeking FCC Approval

LightSquared CEO and executive vice president Sanjiv Ahuja has resigned, the company announced Feb. 28. The news follows a number of recent setbacks for the company, which is funded by billionaire Philip Falcone’s Harbinger Capital Partners hedge fund, and hopes to launch a 4G Long-Term Evolution (LTE) wireless broadband network that can compete with the likes of 4G services from Verizon Wireless and AT&T.

Ahuja will remain chairman, and while Falcone searches for a new CEO, Doug Smith, chief network officer, and Marc Montagner, chief financial officer, will act as co-chief operating officers.

€œSanjiv has shown great leadership in bringing the LightSquared vision to this point, including leveraging his experience in the telecom industry to sign dozens of critical partnerships across the country,€ Falcone said in a statement. €œ[We] look forward to working with new leadership to accomplish our goal of building and operating an innovative, competitive wireless network.€

Earlier this month, LightSquared received notice from the Federal Communications Commission (FCC) that the agency declined to grant LightSquared permission to proceed with its network and was revoking a waiver that allowed LightSquared to use satellite airwaves as€”despite adjustments€”the network continued to interfere with GPS signals.

LightSquared announced it was joining the 4G game after purchasing SkyTerra, which had purchased spectrum after the U.S. FCC Anciallary Terrestrial Component (ATC) Order of 2003€”created for public safety and law-enforcement purposes€”made it possible for satellite operators to offer simultaneous satellite and cellular services over satellite spectrum that happened to also support 4G.

In a Feb. 14 statement, the FCC said is has been focused on freeing up spectrum for mobile broadband use and removing regulatory barriers keeping spectrum from mobile services. Toward this end, it considered LightSquared’s proposal, but based on information from the National Telecommunication and Information Agency (NTIA), it concluded that there’s “no practical way to mitigate potential interference at this time.”

LightSquared followed with a Feb. 15 statement complaining that after “years of receiving regulatory approvals” it had spent nearly $4 billion, only to have the FCC change its mind.

“There can be no more devastating blow to private industry and confidence in the consistency of the FCC’s decision-making process,” Ahuja said in the statement.

The FCC, in its statement, suggested the problem wasn’t with LightSquared but with the spectrum. It wrote:

This proceeding has revealed challenges to maximizing the opportunities of mobile broadband for our economy. … This includes receivers that pick up signals from spectrum uses in neighboring bands. … Congress, the FCC, other federal agencies, and private-sector stakeholders must work together in a concerted effort to reduce regulatory barriers and free up spectrum for mobile broadband. Part of this effort should address receiver performance to help ensure the most efficient use of all spectrum to drive our economy and best serve American consumers.

In 2011, Sprint signed a 15-year agreement with LightSquared that included giving Sprint the opportunity to purchase up to 50 percent of LightSquared’s expected L-Band 4G capacity. Earlier this month, that deal was put on hold.

“Sprint and LightSquared jointly decided to pull back on expenses and stop new deployment design and implementation of LightSquared’s network,” Sprint spokesman Scott Sloat told eWEEK.

According to The Wall Street Journal, Sprint has the right to terminate the agreement as soon as March 16, but would have to return as much as $65 million in prepayments.

Announcing Ahuja’s resignation, Falcone added: €œWe are… committed to working with the appropriate entities to find a solution to the recent regulatory issues. We, of course, agree that it is critical to ensure that national security, aviation and the GPS communities are protected. I am confident that working together, we can solve this problem €¦ €