Pervasip Corp (PVSP)

[Mason Ainsworth]

Tough News re LightSquared . . .

LightSquared Faces U.S. Prohibition After Interference Report
February 14, 2012, 8:29 PM EST
By Todd Shields
Feb. 14 (Bloomberg) -- The U.S. Federal Communications Commission said it won’t let Philip Falcone’s LightSquared Inc. begin service after an Obama administration adviser found that the wireless venture disrupts navigation gear.

Federal agencies have determined that LightSquared’s signals interferes with global-positioning system devices, Tammy Sun, an FCC spokeswoman, said today in an e-mailed statement. The FCC is preparing to withdraw the preliminary approval it granted last year for LightSquared to build a high-speed network serving as many as 260 million people, Sun said.

“The commission clearly stated from the outset that harmful interference to GPS would not be permitted,” Sun said. “The commission will not lift the prohibition on LightSquared.”

The FCC’s action marks a blow to LightSquared and a setback for Falcone’s Harbinger Capital Partners hedge fund, which has invested $3 billion in the venture. Last year’s tentative FCC approval sparked a year of lobbying by LightSquared and opposing GPS companies, and set in motion U.S. testing that LightSquared has denounced as flawed.

Those government tests found that LightSquared’s proposed ground-based network would interfere with navigation equipment including gear used by aircraft, Lawrence Strickling, administrator of the National Telecommunications and Information Administration, said in a letter today to the FCC.

“There are no mitigation strategies that both solve the interference issues and provide LightSquared with an adequate commercial network deployment,” Strickling said in the letter to FCC Chairman Julius Genachowski.

Falcone’s Fund

LightSquared said in an e-mailed release issued before Sun’s statement that it disagreed with Strickling’s findings.

The NTIA and the advisory board that informed its decision “disregard more than a decade of regulatory orders, and in doing so, jeopardize private enterprise, jobs and investment,” the Reston, Virginia-based company said.

The company’s travails in Washington have weighed on Falcone’s hedge fund, which in 2005 began investing in LightSquared’s predecessor, SkyTerra Communications Inc.

Harbinger managed $4 billion at the end of last year, down from a peak of $26 billion in mid-2008. It wrote down its LightSquared position by 59 percent last year because of the uncertainty over LightSquared approval.

Harbinger is paying a 15 percent interest rate for a $190 million loan, almost triple what the riskiest corporate borrowers pay, said two people with knowledge of the loan.

LightSquared said it “fully expects” the FCC “to recognize LightSquared’s legal rights to build its $14 billion, privately financed network.”

The wireless company has pursued FCC approval since November 2010, and cited previous agency decisions that it says granted permission to build towers for its network