February 22, 2012

Documents show Obama’s FCC used regulatory muscle to destroy LightSquared’s competition

The Daily Caller has obtained documents, emails and communications showing how President Barack Obama’s Federal Communications Commission demolished wireless broadband company LightSquared’s competition through a pattern of regulatory decisions apparently aimed at establishing an “open-access” Internet in the United States.

The FCC successfully green-lighted LightSquared’s corporate formation in 2009 by allowing Wall Street hedge fund Harbinger Capital Partners to purchase majority ownership in satellite company SkyTerra. A major obstacle that still remained in LightSquared’s way was competitor GlobalStar.

GlobalStar had a similar operation to the one LightSquared was building at the time. A major difference, though, was GlobalStar’s already-orbiting satellites, and the broadband Internet access it was already providing to Americans in rural areas of the country.

GlobalStar leased terrestrial spectrum to Open Range Communications, a company that provided broadband Internet access to customers in underserved parts of rural America. Open Range’s business model depended on a 2008 loan, worth $264 million, from the U.S. Department of Agriculture’s Rural Utilities Service.

In 2008 the FCC gave GlobalStar a 16-month waiver from so-called “gating” rules, which required it to guarantee that its satellite service would be continuously available everywhere it offered broadband service, and also required it to maintain spare satellites in case of an urgent need. GlobalStar had said the issues its system faced would be fixed when it could launch 24 new satellites, which it planned to do by July 1, 2010.

The waiver was meant to allow GlobalStar and Open Range to continue building their networks while GlobalStar fixed those issues. Open Range depended on GlobalStar for its continued operation.

Then, the unthinkable happened: On April 6, 2009 an earthquake struck L’Aquila, Italy, damaging a factory that made component parts essential to GlobalStar’s satellites. The factory closed, reopening eight months later in early December 2009. (RELATED: Documents: LightSquared shaping up as the FCC’s Solyndra)

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