11.18.11

LS in Wonderland

Posted in LightSquared, Operators, Regulatory, Spectrum at 5:29 pm by timfarrar

The documents released by Citizens for Responsibility and Ethics in Washington (CREW) from the responses to their FOIA request to the White House’s Office of Science and Technology Policy (OSTP), don’t yet provide any smoking guns about the process by which LightSquared was able to get its FCC waiver in January 2011, after applying for it one year ago today. However, the information that is currently online represents only a tiny fraction of the 13,450 responsive documents supplied by OSTP, so it is hard to tell if there is anything more significant still to emerge.

In my view, the most intriguing new document is the January 12 2011 draft of LightSquared’s commitment letter to the FCC, which states that the “industry working group comprised of participants in the telecom and GPS industries…should be lead (sic) by the Commission“, whereas in the final version of the letter this paragraph was removed (and LightSquared was ultimately appointed by the FCC to lead the Technical Working Group). This change seems to have been agreed to by the FCC in exchange for LightSquared stating that “we are willing to accept as a condition on a grant of our request the creation of a process to address interference concerns regarding GPS and, further, that this process must be completed to the FCC’s satisfaction before LightSquared commences offering commercial service”, a commitment which LightSquared’s counsel described as “an investment & customer killer”.

Perhaps more significantly, the documents also provide a very interesting perspective on how views of LightSquared evolved within the FCC, White House and NTIA between mid 2010 and summer 2011. In July 2010, Jim Kohlenberger, Chief of Staff at the OSTP, thought LightSquared’s deal with NSN was “very exciting“, while in September 2010 he kept “hearing great things” about LightSquared. By January 2011 LightSquared’s relationship with the White House was sufficiently close that LightSquared’s counsel was asking “if there’s anything NTIA can do with the press on background to calm the waters” because “Press reports…are leading to big problems with investors, present & potential, customers, Sprint, et al”.

However, as information emerged about the extent of GPS interference, that changed pretty dramatically. In particular, after the submission of the Technical Working Group report in late June, pressure from Sen. Grassley for the FCC to provide documents meant “things [were] heating up” and by early August it was clear that LightSquared would be experiencing “headwinds” because the FCC Chairman was about to throw LightSquared under the bus, with his announcement on August 9 that he would not permit LightSquared to operate until interference concerns were resolved. By August 16, even the NTIA Administrator was indicating that any suggestion by LightSquared that they discuss how to move forward meant that “LightSquared is in Wonderland” (ironically a comparison that I also remarked on). Then in mid September, it became clear, after the FCC’s Public Notice mandated further testing, that everyone in government (and apparently the FCC) would “distance” themselves (exactly as I predicted), telling a Harbinger representative that “I must ask that you stop communicating with me regarding the LightSquared matter.”

Once this timeline and the current attitude of key people in government is understood, it becomes evident how truly dire LightSquared’s prospects are. Simply put, there is now no chance whatsoever that there will be any positive ruling from the FCC (or even an end to the testing, which can be prolonged almost indefinitely if the government insists on testing LightSquared devices as well – indeed the FAA presented a timeline yesterday with potentially multiple stages of further testing, including handsets, beginning in the Spring of 2012), and it is simply a question of wondering when the money all runs out.

6 Comments »

  1. TMF Associates MSS blog » Let’s ignore the federal government! said,

    November 21, 2011 at 12:18 pm

    [...] LightSquared understands only too well that the entire federal government now views the company as radioactive, but can LightSquared seriously intend to argue that its own “independent” testing is [...]

  2. TMF Associates MSS blog » Not very happy holidays for the MSS sector… said,

    November 29, 2011 at 12:20 pm

    [...] (which is ludicrously unrealistic once you understand that LightSquared’s political backing has evaporated and even the FCC has basically given up on them, but may reflect the fact that JPM co-led (with [...]

  3. TMF Associates MSS blog » Lights out… said,

    December 9, 2011 at 12:47 pm

    [...] applicable to service under the waiver, it will be hard to argue that when it was very clear from LightSquared’s discussions with the FCC and White House in January what was intended. However, it remains possible that the FCC will simply wait for LightSquared to [...]

  4. TMF Associates MSS blog » I fought the law (of physics) and the law won… said,

    January 18, 2012 at 12:15 pm

    [...] representing a remarkable turnaround from this time last year, when most people thought that any favoritism was going in the opposite direction. However, it appears that LightSquared’s protests are going to have absolutely no effect, [...]

  5. TMF Associates MSS blog » Get your spectrum here…or not… said,

    January 22, 2012 at 8:13 pm

    [...] were specified by NTIA in the first place. Remember also that last August Mr. Strickling believed LightSquared was “in Wonderland” in thinking it could move forward after the initial test results came [...]

  6. TMF Associates MSS blog » There’s no there there… said,

    February 9, 2012 at 9:22 pm

    [...] agencies involved”. However, now LightSquared appears to have lost its backing from both the White House and the FCC (and the views of the federal agencies are pretty clear), LightSquared cannot seriously [...]

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