Phil Falcone's Harbinger Capital
is the primary shareholder in communications company LightSquared
, owning all but a sliver of the company. LightSquared's claim to fame is that it has the technology to build a nationwide 4g network. By accessing satellites, the company can eliminate dead spots across the country and provide mobile data access anywhere in the continental 48. The problem is that government officials are saying that LightSquared's technology interferes with the nation's defense and navigation systems.To access this risk, there has been a series of tests done. Recently, someone leaked test results that showed that "LightSquared's high-speed wireless services caused 'harmful interference
' on 75 percent of receivers tested."
The test was government-sponsored.
Falcone has been met with more than a little resistance on Capitol Hill. Senator Charles Grassley (R-Iowa) has alleged that Falcone used donations to smooth
the regulatory way for the communications start-up and Senator Pat Roberts (R-Kansas) introduced a bill
that would raise the regulatory bar for the company to gain approval for its 4g network. To help gain support in Washington, Falcone has spent millions on lobbying
for LightSquared and, now, LightSquared could be running out of cash
. According to the company's financial statement, that day could come as soon as the second quarter of 2012.
In other words, LightSquared is in a pinch. And, to make matters more pressing, it is "facing a year-end deadline with partner Sprint Nextel Corp.," reports the Wall Street Journal
. As such, LightSquared "pressed federal officials Tuesday to rule against critics who say the company's proposed national wireless-Internet network will interfere with global-positioning systems." LightSquared filed a document that "said the Federal Communications Commission should find that it has no obligation to pay for a fix for the GPS interference and that its opponents can no longer stand in the way of the company's commercial launch, slated for next year."
The LightSquared filing comes less than two weeks before Sprint's deadline requiring that LightSquared receive FCC clearance to operate its proposed nationwide 4g network. The clearance is a condition of a 15-year fourth-generation-spectrum and equipment-sharing agreement, an agreement that would help LightSquared save roughly $13 billion through the end of this decade.