By John Aloysius Farrell and Fred Schulte, iWatch News
When the Federal Communications Commission granted LightSquared Inc. expedited approval to launch a new wireless Internet service, some powerful voices in Washington expressed alarm, including the Pentagon and one-third of the U.S. Senate.
LightSquared's bold $14 billion plan, its detractors said, could cripple GPS systems and threaten aviation safety, disrupt military and rescue operations and interfere with high-tech farming equipment and the everyday navigation devices used by millions.
LightSquared says it has pursued its case through official channels. But little gets done in the nation's capital without some kind of political connection, and in this regard, LightSquared's bloodline is particularly rich. Its ties to President Obama's supporters and the administration's policy interests run deep, explaining the company's ability to do battle with powerful entrenched interests:
- Several major Democratic campaign contributors and longtime Obama supporters have held investments in the company and its affiliates during its tangled decade of existence. They include Obama's good friend and political donor Donald Gips, his former White House personnel chief, who now serves as U.S. ambassador to South Africa. Records show that Gips maintained an interest, worth as much as $500,000, as the FCC was weighing LightSquared's request.
- Obama himself was an early investor and came to the presidency a firm believer in expanding broadband. He remains close to other early investors, like Gips and investment manager George W. Haywood, inviting some to luxe social events at the White House and more intimate gatherings like a night of poker and beer.
- Obama installed one of his biggest fundraisers, Julius Genachowski, a campaign "bundler" and broadband cheerleader, as chairman of the FCC, whose staff granted LightSquared a special waiver to operate.
- LightSquared's current majority owner, hedge fund manager Philip Falcone, made large donations to the Democratic Party while his broadband request was pending before the FCC. He and LightSquared executives met with White House officials. Neither Falcone nor the White House would comment on what was discussed.
- LightSquared employs lobbying firms that wield formidable Democratic firepower: Ed Rendell, former governor of Pennsylvania and onetime chair of the Democratic National Committee, as well as the firm of former House Majority Leader Richard Gephardt.
- Jeffrey J. Carlisle, the company's vice president for regulatory affairs, served with Genachowski and Gips on Obama's transition team.
LightSquared insists it has found a way for its technology to coexist with GPS systems. But as lawmakers and technology experts wrestle over the conflicting claims, some in Congress suspect the FCC of favoritism in its haste to decide the matter.
"It is a textbook example of Washington at work," Ken Boehm , the chairman of the National Legal and Policy Center, told iWatch News . The conservative public interest group is pressing Congress to investigate.
Sen. Charles Grassley , R-Iowa, said he has been trying, without success, to get the FCC to disclose basic information about LightSquared's investors and their relationships to the White House. The agency's "lack of transparency," he says, has raised his suspicions.
"Are there ties between the investors and the administration that might lead to the perception that the administration is biased toward approval?" Grassley said in a statement to iWatch News. " In the absence of transparency, the perception might be that the FCC is rushing the public's business to help a friend in need, regardless of the consequences for the public and the economy."
LightSquared is a privately-held firm that does not have to publicly disclose its owners. The company says that none of the Obama friends and donors currently retain any financial interest in the firm, and regulatory affairs chief Carlisle dismissed the notion that the company's success at the FCC resulted from political influence.
"LightSquared participates in numerous proceedings in front of the FCC and other regulatory authorities," said Carlisle. "We trust that regulatory decisions in these proceedings are made on the merits of the case, and believe that they have been."
White House officials echoed that. "The Federal Communications Commission is an independent agency with its own standards and procedures for considering these types of decisions and we respect their process," said White House spokesman Eric Schultz.
But the controversy draws attention to the sway of campaign donors on the administration, a sensitive topic given Obama's campaign promise to limit the clout of special interests in Washington. iWatch News recently reported that nearly 200 of Obama's bundlers have landed plum government jobs and advisory posts, won federal contracts worth millions of dollars for their business interests or attended numerous elite White House meetings and social events.
FCC chairman Genachowski, a friend of Obama since they attended Harvard law school, bundled more than $500,000 for the 2008 Obama campaign. He also has made dozens of trips to the White House, leading some Republicans in Congress to complain that the regulatory chief is too cozy with the administration.
The FCC's backing of LightSquared is especially controversial because of concerns that the new network could interfere with such a broad range of government, commercial and personal GPS systems. GPS, which stands for global positioning system, is a space-based technology that, since being adapted for civilian use in the 1990s, has allowed objects to be tracked in motion. Half a billion GPS devices are in use in North America, the industry says.
The Department of Defense and Federal Aviation Administration have invested more than $38 billion in the technology and expect to spend billions more in coming years, while private industry has sunk at least $2 billion more in the systems. The defense department argues that the FCC did not give adequate consideration to its concerns over possible GPS interefence.
In two rulings, the FCC gave its blessing to Falcone's purchase of the company on March 26, 2010, and for a waiver of FCC rules on Jan. 26, 2011, which will allow the firm to transform what was originally conceived as a satellite-based network to one that relies primarily on some 40,000 radio towers. The signals from towers are far more powerful than space-based ones, and could dot the
I agree with the urgent need for viable high-speed internet connectivity in rural America. No question about that. The problem is the specific frequency band on which LightSquared wants to build its network. The band is, by international agreement -- and for extremely good technical reasons -- a low-power band for communication directly with satellites.
The reason LightSquared wants to use this band is because they picked up the license at firesale prices. They simply don't want to have to use another band already approved for the kind of service they want to provide, because it would cost them more. And the FCC has thrown out the long-standing principal that existing users of a band (users who are using the frequencies in the legal manner intended) have priority usage in front of newcomers, especially those who want to use the band in ways not previously allowed.
Nor did my other response say why there's a problem at all. The LightSquared license is, in effect, a transfer of a license previously granted to another company for a satellite communications program. The other company gave up their license (perhaps through bankruptcy?) and LightSquared bought it. However, the original license was for a system that broadcast a very narrow signal directly to a satellite with low power. There was no risk of interference with adjacent services -- appropriate, because the band in which the frequencies were licensed contained only satellite communication services.
LightSquared bought the license, promised to install a single satellite terminal to satisfy a license condition, then applied for an exception to install tens of thousands of high-powered towers (80dB stronger -- one billion times as strong -- than GPS signals) all over the country. And that's why there's a problem.
I personally read the 300-page report produced by the Technical Working Group (TWG) appointed to investigate the LightSquared license's effects on GPS reception. The evidence is overwhelming that full deployment of LightSquared's transmission towers on the upper of the two frequencies they are licensed to use will effectively eliminate the usability of GPS in the great majority of the Lower 48 land mass. LightSpeed's "defense" claims the GPS manufacturers should install filters to prevent interference with GPS -- but filter designers and manufacturers have shown that such filters might not be possible without increasing the size of GPS devices by a factor of two or more.
Even on the lower of the two frequencies, interference with GPS reception is so severe that most urban areas would be unable to use GPS for ordinary street navigation, seriously endangering public safety agencies' effectiveness.
The TWG's report demonstrates overwhelmingly that LightSquared's licence, while helping make a few people richer, will cause most of us -- including the airlines and the military -- to effectively lose the ability to use GPS for any meaningful purposes.
If you care about this, please find and read the report yourself, then contact your congress-persons and
http://www.pnt.gov/interference/lightsquared/
In short, LightSquared's proposed original network would effectively render GPS unusable in large portions of the USA. This affects all classes of GPS equipment, ranging from consumer GPS to high precision aviation, industrial, scientific and military GPS.
Big dogs know how to sniff butts and get on with things, little yappy dogs get scraps.
He was just flabbing his jaw to make it sound good.
As for LightQuared's ties to the administration, I find it laughable that Grassley or anyone in Congress for that matter would dare to suggest that political contributions result in undue influence.
As for the technical basis for the conflict, more can be found here: http://www.pnt.gov/interference/lightsquared/
It really does look like this technology is a terrible, terrible idea.
The internet is an idea that should not be limited by greedy corporations. We need to break these big boys up and allow more competition. You already have multiple service providers limiting your access to the internet.
Shame!
It's about LightSquared's 4G LTE (Long Term Evolution) Wireless Broadband, and it's owners, Harbinger Capital Partners LP...and the $7 Billion Dollar equipment contract with Nokia Siemens Networks, which are acquiring Motorola's Wireless Infrastructure Business.
It's about Nokia Siemens first significant LTE contract for radio access equipment in the US and follows the vendor's deal to supply IP-Multimedia Subsystem (IMS) equipment to Verizon Wireless for its LTE network.
And it's about Clearwire, a company that joined forces with Sprint Nextel, Comcast, Time Warner Cable, Google, and Intel in 2008 to build a nationwide wireless broadband network using a competing "4G" technology called WiMax. Clearwire has already spent more than $6 billion in developing 71 markets. And today the company is struggling to come up with more cash to fund the rest of its network plan.
There are a lot of companies involved...and Sprint-Nextel, appears to be courting them, allowing the use of the Sprint-Nextel 3G Network Infrastructure, in return for LightSquared 4G Services. It's not about concerns...it's about money!!!