If you thought the half-billion-dollar, stimulus-funded Solyndra bust was a taxpayer nightmare, just wait. If you thought the botched Fast and Furious gun-smuggling surveillance operation was a national-security nightmare, hold on. Right on the heels of those two blood-boilers comes yet another alleged pay-for-play racket from the most ethical administration ever.
Welcome to LightSquared. It’s a toxic mix of venture socialism (to borrow GOP senator Jim DeMint’s apt phrase), campaign-finance influence-peddling, and perilous corner-cutting all rolled into one.
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The company is building “a state-of-the-art open wireless broadband network.” Competition in the industry is a good thing, of course. But military, government, and civilian aviation experts have long objected to LightSquared’s potential to interfere with the Global Positioning System (GPS) satellite network. As the government’s own Positioning, Navigation and Timing agency explained:
“The GPS community is concerned because testing has shown that LightSquared’s ground-based transmissions overpower the relatively weak GPS signal from space. Although LightSquared will operate in its own radio band, that band is so close to the GPS signals that most GPS devices pick up the stronger LightSquared signal and become overloaded or jammed.”
Two high-ranking witnesses — Air Force Space Command four-star general William Shelton and National Coordination Office for Space-Based Positioning, Navigation and Timing director Anthony Russo — have now blown the whistle on how the White House pressured them to alter their congressional testimony and play down concerns about LightSquared’s threat to military communications. According to Eli Lake of The Daily Beast, both officials were urged to express confidence in the company and endorse its promise to address any technical concerns “within 90 days.”
General Shelton had noted earlier this year: “Within three to five miles on the ground and within 12 miles in the air, GPS is jammed by [LightSquared’s] towers. . . . If we allow that system to be fielded and it does indeed jam GPS, think about the impact. We’re hopeful we can find a solution, but physics being physics, we don’t see a solution right now.”
Despite industry-wide protests, the firm somehow received fast-track approval for a special FCC waiver that grants LightSquared the right to use wireless spectrum to build out a national 4G wireless network on the cheap. Ken Boehm, of the conservative watchdog National Legal and Policy Center in Washington, D.C., summed up the deal earlier this year: “LightSquared will get the spectrum for a song, while its competitors (e.g., AT&T and Verizon) have to spend billions.”
The current “fix” LightSquared proposes to address the interference problems is a costly conceptual pipe dream that could require massive retrofitting of millions of handheld GPS devices. GPS expert Eric Gakstatter scoffs: “I’ve been pretty open-minded about LightSquared proposing a solution, but this really insults our intelligence. [A]s we’ve seen previously with LightSquared, it’s not about finding a practical solution for the GPS user community; it’s all about selling an idea to the FCC. The problem is that the FCC doesn’t have to live with LightSquared’s half-baked ‘solution’; we do.”
So, what’s greasing LightSquared’s skids? Hint: LightSquared used to be known as “Skyterra.” In 2005, Obama put $50,000 into the speculative firm — raising eyebrows even among his water-carriers at the New York Times. The paper noted that Skyterra’s principal backers at the time of the investment included four Obama “friends and donors who had raised more than $150,000 for his political committees.”
One of those pals who urged him to buy stock in Skyterra was George Haywood, a major Skyterra investor and campaign donor who chipped in nearly $50,000 to Obama’s campaigns and to his political action committee, as did his wife.
Coincidentally, Obama bought his Skyterra stock the very same day the FCC “ruled in favor of the company’s effort to create a nationwide wireless network by combining satellites and land-based communications systems.” The Times reported that immediately after that morning ruling, “Tejas Securities, a regional brokerage in Texas that handled investment banking for Skyterra, issued a research report speculating that Skyterra stock could triple in value.”
Coincidentally, Tejas and its chairman, John J. Gorman, were also major backers of Obama — flying him in a private plane for political rallies and pitching in more than $150,000 for his campaign coffers since 2004. Obama sold his stock at a loss in November 2005, but his political relationship with the company was cemented. In 2009, billionaire hedge-fund manager Philip Falcone — whose firm Harbinger Capital Partners is reportedly under investigation by the Securities and Exchange Commission for market-manipulation abuses — acquired Skyterra.
Coincidentally, Falcone, his wife, and LightSquared CEO Sanjiv Ahuja have contributed nearly $100,000 between them to the Democratic party during critical White House meeting periods and negotiations over LightSquared’s regulatory fate.
Oh, and coincidentally, there’s $6 billion earmarked for a “public safety broadband corporation” buried in the Obama jobs proposal just as LightSquared pushes into that market, too.
It’s all just one strange quirk of timing, Team Obama shrugs. Except, as we all should know by now: There are no coincidences in Chicago-on-the-Potomac. Just an endless avalanche of quids, quos, and taxpayer woes.
Now this is the Michelle that I know and love. Thanks for leaving the Gardasil nonsense behind and focusing on real issues. Solyndra, Fast & Furious, LightSquared...and probably more to come. Talk about a target rich environment! The RNC & their political ad folks must have mixed emotions at this point. So much great material to work with, where do you start? Message to the Obama team...please consider increasing that billion dollar budget for the campaign. Because it just might be the most effective stimulus spending yet during the four years of this administration. The creation of hundreds of new Republican governmental positions around the country, draining (redistributing) mega millions in wealth from rich Democrats and corrupt unions to either oblivion, or to more deserving conservatives working clandestinely behind the lines, will be stimulating to our great republic in ways they never imagined!
The Gardasil "nonsense" was actually not about Gardasil but specifically about what is discussed in this article. Yet again the GOP obfuscates and muddles this important issue of corruption which Ms. Malkin succeeds in clarifying.
The FCC wants additional wireless competition in the worst way. And that is how it has gone about getting it.
Existing wireless carriers, who are known in the business as commercial mobile radio service (CMRS) providers, acquired their spectrum (with a few exceptions) through auctions or by buying it from other licensees. Providers of mobile satellite service (MSS) acquired their spectrum from the government without any payment for it other than the cost of hiring lawyers, filing forms, and (rarely) going to through a proceeding if two or more applicants applied for the same license. LightSquared is the successor to two mobile satellite companies that operated in the L band: SkyTerra and MSV.
MSS providers offer services that send signals to a satellite (either from a customer’s handset or from a ground station) and from the satellite (again, either to a customer’s handset or to a ground station). The ground station is the satellite network’s gateway to the public telephone network (PTN). Mobile satellite service offers a lot of advantages; but, it has some drawbacks, too. Satellite telephones do not work well in buildings or in cities where “architectural shading” tends to block the signal. They also have trouble in deep foliage and places where line of sight to the satellite is blocked. Back in 2004, SkyTerra proposed that it should be able to use its spectrum to build out an “alternate terrestrial component (ATC).” This is a polite way of saying that it wanted to build cell sites so it could improve its service and compete better with the CMRS providers. One problem: the Telecommunications Act of 1996 (47 USC 309(j)), requires that, if mobile satellite frequencies are used for terrestrial (or CMRS) service, they must be auctioned off to the highest bidder. The FCC obliged by finding that an ATC network was “ancillary” to MSS and, so, no auction was required. However, SkyTerra (and, ultimately, LightSquared) would have to offer an “integrated service” by which was meant that LightSquared would have to offer its service through handsets capable of operating on both the satellite and ATC networks.
Such dual mode handsets are (1) expensive and (2) bulky. So, LightSquared went back to the FCC seeking a “clarification” (or a waiver as the case may be) that it could offer handsets operating on the ATC network only. In other words, LightSquared would now compete directly with the CMRS carriers, but without the bother of buying its spectrum in an auction.
In a “hurry-up” proceeding over the Christmas holidays, the FCC “conditionally” approved the waiver in the face of near uniform opposition from CMRS carriers and GPS interests. However, before LightSquared may begin commercial ATC operations, the FCC required it to show that its service will not cause harmful interference to GPS systems. This brings us to our current state-of-play.
Meanwhile, Dish TV has now announced that it wants to acquire two bankrupt MSS providers in the 2 GHz band and do exactly as LightSquared has done. Once again, if approved, the government will receive no auction revenues for this terrestrial use of satellite spectrum and another CMRS competitor will enter the marketplace with an investment advantage over the existing providers. And, yes, five or ten years from now when LilghtSquared and Dish TV flip their spectrum to someone else, the owners will realize billions of dollars, all thanks to the government’s industrial planning.
If Lightsquared actually gets to go live, I would find it quite ironic if, say, Air Force One would crash as a result of GPS interference from the aforementioned. During this administration, of course.
Thank you WLR . Your comments are the reason that I love the internet with all of its genuinely democratic potential .Keep up the good work as you obviously have more to offer than merely an opinion . We need light and heat .
