LightSquared Scrutinized for Allegedly Cozying Up to White House
It seems space-age startup LightSquared can't catch a break, and its vision to build an advanced 4G cellular network is under threat yet again. This time the company faces Republican allegations of regulatory interference.
During a House strategic forces subcommittee hearing, House representative and subcommittee chairman Michael Turner (R. Ohio) asked for an investigation into LightSquared's wireless network proposal, sighting alleged pressure by the White House on the FCC to approve the plan.
As reported by the Wall Street Journal, the public watchdog group known as The Center for Public Integrity accused LightSquared of plying White House officials to exert influence over the FCC's proceedings. In fact, the entity says it has proof of this sordid behavior, including an e-mail from a LightSquared attorney pressing U.S. Chief Technology Officer Aneesh Chopra for a meeting with company CEO Sanjiv Ahuja.
Adding more fuel to the fire was the absence of FCC Chairman Julius Genachowski at the hearing in question. Congressional staffers also reportedly accused the White House of pressuring Air Force General William Sheldon—who was slated to testify before the FCC on the matter—to use topics and language friendly to LightSquared's case. For the record, both LightSquared and a representative for the general have denied any wrongdoing.
LightSquared CEO Sanjiv Ahuja issued he following statement:
Any suggestion that LightSquared has run roughshod over the regulatory process is contradicted by the reality of eight long years spent gaining approvals. It’s also ludicrous to suggest LightSquared’s success depends on political connections. This is a private company that has never taken one dollar in taxpayer money.
LightSquared envisioned its high-speed 4G network to be heavily dependent on space-based satellites augmented by terrestrial infrastructure. After receiving the go-ahead from the FCC back in January, it appeared that LightSquared's future was bright. Then the GPS industry voiced objections asserting that LightSquared's proposed network operations would disturb the nation's critical Global Positioning System. Even General Motors stepped in to say LightSquared's plans would meddle with the automaker's OnStar system.
To counter these fears, LightSquared submitted a plan to the FCC explaining how it wold work to avoid any wireless interference with GPS bands by using frequencies placed well apart from what the government uses. However, the company admitted openly that much testing and strong industry cooperation was needed before its strategy could gain approval.
There is a lot riding on LightSquared getting its 4G network off the ground. Sprint, the country's third-largest cellular carrier, announced big plans to sign up with LightSquared's proposed service for a period of 15 years. Now that the LightSquared deal has become a game of political football, it's far from a safe bet.