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    LightSquared, With Zombielike Persistence, May Try to Overturn FCC Ruling

    By
    Wayne Rash
    -
    March 15, 2012
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      In a legal Hail Mary that seems unlikely to produce positive results, Philip Falcone, the billionaire investor behind the LightSquared broadband data service, has hired two of Washington’s highest profile lawyers to try to overturn the Federal Communications Commission’s decision not to let the company operate its network.

      The FCC withdrew approval after a series of tests by the National Telecommunications and Information Administration (NTIA) and the military showed conclusively that the LightSquared data network would effectively kill GPS use in the United States.

      Meanwhile, LightSquared continues to suffer losses of all types. Sprint Nextel has now withdrawn its agreement to provide tower space for LightSquared’s transmitters and antennas, which leaves the company without physical infrastructure. Leap Wireless, the company that sells the Cricket brand of wireless phones and devices, has now dropped LightSquared and signed on with Clearwire for Long-Term Evolution (LTE) services. Clearwire is majority-owned by Sprint Nextel.

      The lawyers representing LightSquared include Ted Olson, who represented President George W. Bush before the U.S. Supreme Court in the disputed election case, Bush v. Gore. Also representing the company is Eugene Scalia, son of U.S. Supreme Court Justice Antonin Scalia. Scalia has a long history of successfully fighting regulatory decisions by the federal government. Both lawyers are members of the firm Gibson Dunn & Crutcher in Washington.

      While LightSquared has hired the new lawyers, the company has not said what its plans are for these attorneys.

      Both men are skilled litigators in a long list of federal court cases in which various agencies have been sued by private companies. However, LightSquared has other options as well. It could, for example, attempt to recover its losses from moving ahead, assuming the FCC would give approval to operate since approval had been given. The company could also attempt to negotiate a spectrum swap that would allow it to move forward with its planned LTE network on a frequency that wouldn’t interfere with GPS.

      Spectrum Swap?

      One such option could be to request the use of spectrum that the FCC has said it will auction off to raise money for the payroll tax cut approved by Congress in February. It’s possible that LightSquared could arrange a swap of its existing spectrum allocation, which was originally intended for mobile satellite communications and not for the terrestrial data service LightSquared had in mind, for other sections of spectrum that are farther away from GPS and unlikely to interfere.

      The only potential downside of such a spectrum swap is that the FCC is hoping to raise a lot of cash, and LightSquared paid a relatively low price for the chunk of spectrum it got because most potential bidders assumed it would have limited use. But even if the spectrum swap wasn’t completely free to LightSquared, it could allow the network to operate and it would free the company from its current regulatory albatross.

      In an interview with Politico, Olsen said that what happened to LightSquared is “an egregious example” of the government encouraging the investment that LightSquared made. Olsen argues that the government acted arbitrarily.

      Olsen also noted that he’s getting involved because of the vast amount of money that LightSquared stands to lose. “It looks to me like the government has acted arbitrarily after inducing the expenditure of an enormous number of resources [sic],” he told Politico.

      Previously, LightSquared charged that the government interference tests were rigged and designed to show that the LightSquared LTE network wouldn’t work with GPS. The company told eWEEK at the time that the tests weren’t conducted fairly, and that the details of the test results were kept from LightSquared.

      The move to engage two high-profile lawyers in an effort to keep its doors open may be LightSquared’s last available action. While it remains unclear what moves the company will do next, operating the data network it had proposed does not appear to be one of them. However, the comments by Olsen seem to indicate that LightSquared’s goal is to recover the money the company has put into the effort to bring its network to market, not necessarily to overturn the FCC decision.

      In fact, the company has a number of viable options that could fall into place, but operating the terrestrial network that would interfere with GPS is out of the question. Even if Olsen and Scalia were able to reopen the FCC decision, which seems unlikely, Congress has passed, and the President signed, legislation that would prevent LightSquared from ever operating its network as it has been proposed.

      There’s no question that LightSquared’s lawyers are aware that the legislation is in place, meaning that just getting a court to overturn an FCC decision isn’t enough. But the mood in Congress on both sides of the aisle is clearly set squarely against LightSquared’s proposed network. If the FCC seemed likely to face a court challenge in its decision, Congress could, and likely would, take action to prevent it. After all, the prospect of millions of enraged GPS users massing on the West Lawn of the Capitol (assuming they could find it without their GPSes) is not something an elected official would want to contemplate.

      Wayne Rash
      https://www.eweek.com/author/wayne-rash/
      Wayne Rash is a freelance writer and editor with a 35-year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He is the author of five books, including his most recent, "Politics on the Nets." Rash is a former Executive Editor of eWEEK and a former analyst in the eWEEK Test Center. He was also an analyst in the InfoWorld Test Center and editor of InternetWeek. He's a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine.

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