House GOP: FCC mishandled review of LightSquared, costing investors ‘billions’

House Republicans accused the Federal Communications Commission (FCC) on Tuesday of mishandling its review of wireless start-up LightSquared, leading to "billions of wasted dollars."

The company filed for bankruptcy on Monday due to opposition from the FCC.

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Philip Falcone and his investment firm, Harbinger Capital, had invested billions of dollars in LightSquared's plan to build a high-speed wireless network that would have served more than 260 million people.

The FCC had granted LightSquared a conditional waiver to move forward in 2011, but the agency moved to block the network earlier this year after tests showed it would interfere with critical GPS devices, including those used by airplane pilots.

In a joint statement on Tuesday, GOP Reps. Fred Upton (Mich.), Greg Walden (Ore.) and Cliff Stearns (Fla.) said the FCC "rushed" its review and gave LightSquared a special waiver before fully evaluating the potential impact on GPS devices.

The lawmakers launched an investigation in February into the FCC's handling of LightSquared.

“In addition to the broader broadband implications, the FCC’s rushed process resulted in special waivers and conditions and billions of wasted dollars," they said on Tuesday. 

"Now, more than ever, we need to get to the bottom of how we got this far down a dead-end road. There are many unanswered questions, specifically about whether the FCC’s own objectives led to sloppy process. We are continuing to examine the information we’ve received so far to determine what happened and how it can be avoided in the future."

The FCC has denied giving LightSquared any special treatment, but expanding wireless Internet is a top priority for the agency under Chairman Julius Genachowski.

The FCC did not immediately respond to a request for comment.

Testing showed that LightSquared's signal did not bleed into the GPS band. Instead, the problem was that GPS receivers were too sensitive to filter out LightSquared's powerful cell towers operating on nearby frequencies.

LightSquared argued that it was the GPS industry's responsibility to build receivers that only listened to their own designated frequencies, but GPS companies argued that LightSquared was trying to build a cellphone network relying on frequencies that should only be used by satellites, which transmit much fainter signals.

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