After a tumultuous year which saw LightSquared garner attention by attempting to become the first wholesale LTE network powered by satellite arrays and signing on carriers such as Sprint, Leap Wireless and countless virtual operators, Philip Falcone’s attempt to become the Craig McCaw of LTE has been struck dead thanks to the FCC and the National Telecommunications and Information Administration for failing multiple attempts to prove to both regulators that the network would not substantially interfere with GPS reception and equipment despite initially receiving a waiver by the regulator in 2010, provided the network could operate the network using satellite spectrum without issue.
With the rejection of the network in its current state due to multiple failed interference tests and rejected proposals to remedies in order to resume the rollout over the past year, the shareholders that make up the majority of the investors in Harbinger Capital Partners have filed suit against Falcone alleging that he intentionally misled investors into spending billions on the network knowing full well it could not be rolled out and would be rejected.
LightSquared previously touted an agreement with Sprint in order to utilize its forthcoming LTE network along with its own planned network as the basis for a new wholesale LTE capacity sales arrangement that was to benefit both parties, but with the the rejection of the network by the FCC, Sprint’s short-term plans involving LightSquared are said to be discarded in favor of an increased focus on its LTE rollout with Network Vision and Clearwire’s own LTE plans, while smaller regional and rural carriers will be the biggest losers in this situation, as many were relying on LightSquared to provide them with the infrastructure necessary to provide LTE service, particularly in underserved rural areas which was to be LightSquared’s focus before the entire plan collapsed.
The shareholders that make up the majority of Harbinger Capital Partners are seeking unspecified damages in their suit against Falcone as the network is seeking alternatives in order to roll out its long stalled network while it continues to lose money for every day it does not operate.
