01.14.11

A tale of two cities

Posted in Financials, LightSquared, Operators, Regulatory, Spectrum at 9:55 am by timfarrar

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity…”. That quote from Charles Dickens certainly seems a good summary of the current supposed spectrum crisis, and the last few weeks have been first the best of times and now the worst of times for Harbinger and LightSquared. Initially it looked as if luck was on their side, as their satellite antenna problem was resolved (something estimated to us as less than a 20% probability by technical experts) and the FCC seemed poised to approve an updated business plan that would enable LightSquared’s partners to offer terrestrial-only service and handsets. But now, an intervention from the NTIA and other US government departments has left observers wondering whether and how LightSquared will be able to move forward.

However, I’m more intrigued by the differences between the two cities of New York and Washington DC, as I wonder if, when all’s said and done, this will end up as a tale of how the ambitions of a New York financier were stymied by the bureaucratic and regulatory complexities of Washington DC. In that context, its particularly interesting to look at another contrast between the two cities, namely what you can get for $20M in each place.

In New York, for example, $20M will cover less than half the cost of a mansion, especially if you need to pay for extensive renovations and hire a security guard to “push and jostle” nosy photographers. On the other hand, in Washington DC, $20M would pay for an entire federal agency for six months, given that the estimated annual budget of the National Telecommunications and Information Administration (NTIA) is only $40M for FY2010 and $46M for FY2011. Of course, despite what some people might suggest, it appears that not everything in Washington DC is for sale.

1 Comment »

  1. TMF Associates MSS blog » Can’t buy me love? said,

    April 30, 2012 at 8:09 am

    [...] spectrum swap, when Falcone no longer has the billions to achieve that goal. After all, as I noted back in January 2011 and has been clear from the number of lobbyists hired by the company, LightSquared certainly felt [...]

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