Wednesday, 26 April 2017
Last updated 21 hours ago
Jan 14 2011 | 1:22pm ET
For Philip Falcone, the new year is starting off pretty much the same way the old one went out: badly.
Four U.S. Cabinet agencies want the Federal Communications Commission to take a long, hard look at the Harbinger Capital Management founder's plan to build a nationwide wireless network. Until the "significant interference concerns" are resolved, the venture, LightSquared, will not be approved, the FCC said.
"It is incumbent on the FCC to deal with the resulting interference issues before any interference occurs," the Commerce Department's Lawrence Strickling wrote to the agency. Julius Knapp, who heads the FCC's office of engineering and technology, said the agency would "ensure that any approvals would not result in harmful interference to current licensed users."
In addition to Commerce, the departments of Defense, Transportation and Homeland Security want the LightSquared proposal reviewed.
Falcone has poured some 40% of Harbinger's assets into the ambitious plan, which is set to begin trials in four cities this year. The investment has caused a good deal of concern for investors and may have contributed to redemptions at the firm, which manages just $7 billion today, down from more than $20 billion in 2008. It also hasn't helped the firm's performance; Harbinger's main funds were down about 12% last year.
The increased scrutiny for LightSquared comes after a difficult year for Harbinger. The firm found itself under fire from both investors and the Securities and Exchange Commission for a $113 million loan Falcone took from Harbinger hedge funds to pay a tax bill. And Falcone's move to create a permanent capital vehicle produced a lawsuit seeking to overturn the deal.