LightSquared Fiasco Puts Harsh Spotlight on FCC's Genachowski

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Genachowski photoIn a major victory for the National Legal and Policy Center, the Federal Communications Commission (FCC) yesterday reversed itself and revoked a controversial waiver it had granted LightSquared, which would have allowed the company to deploy a national wireless network. The reversal is not only a major setback for LightSquared's billionaire owner Phil Falcone, but puts a harsh spotlight on the role of FCC Chairman Julius Genachowski.

According to Cecelia Kang of the Washington Post Tech blog:

The FCC's decision is expected to all but end LightSquared's aspirations to provide mobile broadband services via satellite airwaves -- a plan that was touted from its inception by FCC Chairman Julius Genachowski. Under his tenure, the FCC granted the company a key conditional waiver in January 2011 that was meant to help fast-track the network.

A friend of President Obama's from Harvard Law School, Genachowski has brought a culture of wheeling and dealing to the FCC, on whose decisions billions of telecom dollars ride.

The purported reason for yesterday's reversal was a new report by the National Telecommunications and Information Administration (NTIA) that concluded that there was "no way" to prevent Falcone's network from interfering with Global Positioning Systems (GPS). But other intervening events, such as the attempt by the Securities and Exchange Commission (SEC) to ban Falcone from the securities industry for life, put the FCC on the spot.

When Genachowski and the other Obama FCC appointees did the favor for Falcone, did they have any idea that they might be creating severe technical problems for users of GPS? And why did the FCC jump on Falcone's bandwagon when it had been publicly reported that the SEC and a U.S. Attorney were already investigating Falcone? The only possible answer is that the deal was wired at the White House and that political clout would trump all else.

Only in Barack Obama's version of crony capitalism have executive branch agencies operated at such cross-purposes. The White House staff and the FCC orchestrated a series of favors for Falcone while the SEC is seeking a lifetime ban.

We are proud to have played a role in blowing the whistle on this deal. In February 2, 2011 letter, we asked the House Committee on Government Reform and Oversight, chaired by Rep. Darrell Issa (R-CA), to investigate. We were the first to make the connection between the FCC waiver and Falcone's political influence.