Harbinger-Backed LightSquared Can't Be Fixed, Gov't. Agency Says

Jan 17 2012 | 12:52pm ET

Harbinger Capital Partners' wireless Internet venture suffered another body-blow last week when nine federal agencies unanimously recommended an end to the ambitious plan.

The Space-Based Positioning, Navigation and Timing National Executive Committee wrote to the Commerce Dept., saying that no solution could be found the prevent LightSquared's network from interfering with global positioning systems and that testing of the network should be stopped.

"Based upon this testing and analysis, there appear to be no practical solutions or mitigations that would permit the LightSquared broadband service, as proposed, to operate within the next few months or years without significantly interfering with GPS," the group wrote. The recommendation is not binding on either the Commerce Dept., or the Federal Communications Commission, which will make the final decision.

LightSquared, which has said that its revised plan eliminates most interference issues, immediately went on the warpath, blasting the Space-Based group's testing and accusing some members of bias. Last week, it alleged that Bradford Parkinson, the "father of GPS," might be in violation of conflict of interest rules, serving both on the Space-Based advisory board and the board of directors at GPS maker Trimble Navigation, one of LightSquared's biggest adversaries.

"Government testing has become unfair and shrouded from the public eye," LightSquared said, calling for the tests to be run again with "unbiased officials and engineers." The company also threatened legal action.

Harbinger has poured more than half of its assets into LightSquared.

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