LightSquared huddles with FCC amid reports of cash problems

LightSquared officials met with the FCC last week to discuss a path forward for the company’s long-delayed wireless network amid reports that the company is running dangerously low on cash.

Philip Falcone, the billionaire hedge fund manager who has invested heavily in LightSquared, was among the group that met with Federal Communications Commission staffers last week, according to a disclosure form posted on the agency's website.  

Falcone, LightSquared Vice President Jeff Carlisle and consultant Ashley Durmer met with FCC Chief of Staff Ed Lazarus, FCC legal adviser Amy Levine and Paul de Sa, chief of the Office of Strategic Planning and Policy Analysis.

The LightSquared representatives urged the FCC to "continue to work toward a resolution that would enable the commencement of commercial service over the LightSquared network," according to the disclosure form. They emphasized the "significant investment" they have already made in meeting the FCC's requirements and that other companies have already signed agreements to use LightSquared's network.

LightSquared has invested billions of dollars in plans to launch a nationwide wireless broadband service, but the company has become embroiled in controversy after tests last year showed its network could interfere with GPS devices. FCC officials have said they will not give the company final approval to launch its network until it can demonstrate it has fixed the interference problems.

The company is beginning to run low on cash, according to numerous media reports. LightSquared must receive regulatory approval for its network by the end of the month or risk losing a $9 billion contract with Sprint.

During the meeting, the LightSquared representatives said recent technical modifications have reduced the interference problem and that the company is prepared to launch its network at reduced power levels. They also discussed "alternative technical solutions" to allow them to move forward, according to the disclosure form.

LightSquared says the interference problem is a result of improperly designed GPS devices receiving signals from outside their designated frequency bands. The GPS industry argues that LightSquared is using powerful cell towers on frequencies that should only be used by satellites. 

Some Republican lawmakers have questioned why the FCC allowed LightSquared to get as far as it has in the regulatory process and have suggested the company has benefited from political connections.

In September, Rep. Michele Bachmann (R-Minn.) accused President Obama of "crony capitalism" for allegedly giving favor to his political supporters, pointing to Falcone.

Falcone, who has donated thousands of dollars to both Democrats and Republicans in recent years, says he is a registered Republican and has denied any attempts to influence the process through political connections.

Sen. Chuck Grassley (R-Iowa) has pledged to block Obama's two nominees to fill FCC vacancies until the agency releases internal documents related to its review of the wireless company.

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