LightSquared Doesn’t Expect Bankruptcy to Affect FCC Proceeding; House Commerce Members Want Answers from FCC
LightSquared said it doesn’t expect its bankruptcy filing to affect the FCC’s decision on whether it will revoke its ancillary terrestrial component authority. The filing and ATC proposal “are not technically linked in any way,” a LightSquared spokesman said. House Commerce Committee Republicans meanwhile said the company’s decision to file for bankruptcy underscores the need for more answers on the commission’s handling of the license and waivers granted to support LightSquared’s plans to build a network. The company filed for bankruptcy Monday (CD May 15 p12).
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"Now, more than ever, we need to get to the bottom of how we got this far down a dead-end road,” said House Commerce Committee Chairman Fred Upton, R-Mich., Communications Subcommittee Chairman Greg Walden, R-Ore., and Oversight and Investigations Subcommittee Chairman Cliff Stearns, R-Fla. There are remaining unanswered questions, mainly about “whether the FCC’s own objectives led to sloppy process.” The FCC declined to comment on the legislators’ remarks. LightSquared made the Chapter 11 filing because “under the circumstances, it offers the best opportunity for the company to resolve all issues with the FCC and other government agencies,” the spokesman said. It also helps LightSquared maintain its existing viable business lines and maximize value for all stakeholders, he added.
The filing won’t necessarily impact the commission’s decision, a satellite industry attorney agreed. The bankruptcy was a result of the agency proposing to vacate LightSquared’s ATC authority, he said, but “I don’t think it’s going to make the FCC change its mind about what they propose to do."
LightSquared “implemented a number of corporate initiatives” to avoid the need for a Chapter 11 filing, the company said in its filing with the U.S. Bankruptcy Court for the Southern District of New York (http://xrl.us/bm77x9). Ultimately, it couldn’t reach a mutually satisfactory agreement “with its prepetition secured lenders,” and it was forced to commence Chapter 11 cases “to preserve the value of its assets and pursue a resolution of concerns regarding its spectrum.”
Sprint Nextel refunded the company $67.3 million of a $310 million investment for work on the terrestrial mobile network and its eventual operation, the filing said. If the FCC proceeds to vacate the conditional waiver order and suspend indefinitely LightSquared’s underlying ATC authorization, such events will likely cause significant harm to the debtors, “including their ability to continue deployment of their nationwide wireless broadband network business plan and recoup benefits from the billions of dollars already spent in reliance on its previous approvals received from the FCC.” LightSquared remains committed to finding a resolution with the FCC and the GPS industry to resolve all remaining concerns, it said. There’s a chance that LightSquared can find a solution that the FCC, NTIA and GPS industry can agree on, the satellite lawyer said. “It’s always possible that engineers could come up with a solution that nobody’s thought of. That’s one thing to watch on the technical front.”