Monday, 26 January 2015
Last updated 2 days ago
Dec 12 2011 | 1:40pm ET
As its chief investor dealt with the fallout of possible Securities and Exchange Commission charges, wireless Internet venture is facing some trouble of its own.
The company, backed by Harbinger Capital Partners, laid out plans to halve, on average, monthly bills for its retail partners' customers. LightSquared added that it has signed up more than 30 customers, among them Sprint Nextel Corp. and FreedomPop, a company founded by Skype Technologies co-founder Niklas Zennstrom.
But LightSquared's trumpeted good news was drowned out by some very, very bad news from a government test, which showed that the company's network interferes with 75% of global positioning system devices examined.
"Millions of fielded GPS units are not compatible" with LightSquared's plans, the National Space-Based Positioning, Navigation and Timing Systems Engineering Forums said. "LightSquared signals caused harmful interference to the majority of GPS receivers tested. No additional testing is required to confirm harmful interference exists."
LightSquared has denied that the interference is that serious or widespread, and that simple, cheap fixes could eliminate interference for more than 99% of existing GPS devices. The company blasted the "illegal leak of incomplete government data" in advance of its planned Dec. 14 release.
"This breach attempts to draw an inaccurate conclusion to negatively influence the future of LightSquared and narrowly serve the business interests of the GPS industry," LightSquared said.
The test results aren't the only bad news for the company coming out of Washington. LightSquared's chief bête noir on Capitol Hill, seized upon the SEC enforcement division's push for charges against Harbinger and founder Philip Falcone.
"While this does not mean the SEC definitely will take action against Mr. Falcone and his hedge fund, it does show that the SEC staff believes there is sufficient evidence to consider recommending an enforcement action,” Sen. Charles Grassley (R-Iowa), generally no fan of the SEC, said. “Now the [Federal Communications Commission] is faced with the real possibility that it made a multibillion-dollar grant of valuable spectrum to someone who could be charged with violating securities laws."
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…