LightSquared the FCC’s Solyndra?

posted at 11:05 am on February 21, 2012 by Ed Morrissey

I’ve been writing for weeks about the LightSquared and the FCC’s strange decisions to allow the firm owned by a billionaire hedge-fund manager and Obama donor to attempt to save billions of dollars in establishing a 4G cell network without buying approved spectrum allocations.   The refusal of the FCC to vet this effort themselves, when they had the capacity to determine almost immediately that LightSquared would interfere with military, aviation, and commercial GPS systems, has already prompted Senator Charles Grassley to launch his own investigation of the FCC’s actions and whether the White House exerted any undue influence over them.  LightSquared’s efforts came to an abrupt end this month when the FCC shut down their temporary waiver to operate on satellite-transmission frequencies and required them to end the use of their land-based cell tower systems.

However, Matthew Boyle puts this into a single narrative for the Daily Caller that shouldn’t be missed, connecting the dots and asking whether LightSquared will be the FCC’s Solyndra:

According to White House visitor logs, Obama’s new FCC chairman, Julius Genachowski, a classmate of the president’s from Harvard Law School, met with White House Personnel Director Don Gips on Feb. 18, 2009. Gips’ personal financial disclosure forms show he had between $250,000 and $500,000 of his personal finances invested in SkyTerra via stock options. Gips bundled at least $500,000 in donations to Obama’s 2008 election campaign, and served on the advisory board of Obama’s White House transition team.

It’s unclear what specifically Gips and Genachowski were discussing at that White House meeting; but shortly after that meeting SkyTerra named two members of Obama’s White House transition team to senior leadership positions at the company. On March 9, 2009, SkyTerra hired Gary Epstein, an FCC political appointee for the first few months of the Obama administration and a member of Obama’s transition team, as its executive vice president. On May 11, 2009, SkyTerra named Jeff Carlisle, another Obama transition team member, to serve as its vice president of regulatory affairs.

Not too long after those Obama-tied hires, lawyers for Falcone’s Harbinger fired off an email that may suggest FCC coordination to approve the sale of SkyTerra to Harbinger outside of what is procedurally acceptable. In an email titled “we’re signed off with Team Telecom,” Henry Goldberg of Harbinger’s law firm, Goldberg, Godles, Weiner & Wright, wrote to FCC International Bureau Chief Howard Griboff on July 24, 2009.

“We’ll file the final letter early next week,” Goldberg wrote to Griboff, copying his law partner Joseph Godles.

According to an FCC order filed in March 2010, that FCC International Bureau approval didn’t really happen until a month later, on Aug. 24, 2009. Harbinger’s lawyers seemed to know a month ahead of time that the FCC would approve their proposal.

On the same day Goldberg sent that email to Griboff — July 24, 2009 — SkyTerra asked the FCC to allow it to delay the launch of a new satellite because there was a “potential delay in [its] delivery.” The FCC approved the request, but later denied a near-identical one for SkyTerra competitor GlobalStar based on “extenuating circumstances” in 2010. This appeared to be one in a long line of instances in which the FCC favored SkyTerra, the future LightSquared, over GlobalStar.

I guess GlobalStar didn’t hire enough Obama transition team members.  Recall, too, that Obama was one of the investors in SkyTerra and knew a number of the players involved, both professionally and socially.  That’s not the only time that the FCC and the Obama administration decided to pick winners and losers in competitive situations, either.  The FCC’s approval for Harbinger — owned by suddenly-minted Democratic donor Philip Falcone — to buy Skyterra and turn it into LightSquared hinged on blocking a deal between LSQ and ATT and Verizon for partnerships on the spectrum that LSQ would put into play.  That order didn’t become publicly known until the FCC proposed to reconsider it, and its inclusion apparently came at the behest of other Obama allies:

On April 12, 2010, just one week after Gips cashed in his personal stock, the Public Interest Spectrum Coalition – a left-wing group comprised of the New America Foundation, Free Press, Media Access Project and Public Knowledge — filed comments with the FCC opposing efforts to reconsider part of the agency’s decision to allow the Harbinger–SkyTerra merger. That coalition wanted to preserve the FCC’s requirement that LightSquared would not provide spectrum to AT&T and Verizon without prior FCC approval.

Left-wing billionaire George Soros is reported to have $200 million invested in Harbinger. His Open Society Institute has donated more than $1 million to the four groups that comprise the Public Interest Spectrum Coalition. …

AT&T and Verizon, shocked by the deal, sent scathing comments via their attorneys, questioning the reasoning behind the FCC’s decision.

“Although it is impossible to know what motivated the Commission’s insistence on merger conditions penalizing AT&T and Verizon — since neither the Bureau Order nor any public filing in the proceeding even addresses the issue — there is no possible justification for these conditions,” AT&T’s attorneys wrote, asking the FCC to reconsider the deal’s conditions.

While there is no clear evidence pointing to exactly why the FCC penalized Verizon and AT&T, the publicly stated goals of those Soros-funded organizations that supported the move may be a clue. They believe wireless spectrum “belongs to the public,” and should be subject to as little corporate influence as possible. Their goal is to create a community-oriented, taxpayer-subsidized and highly regulated broadband system, essentially making Internet access a public utility.

This goes way beyond the “public utility” approach.  This is crony capitalism at its most pure form, with government intervening to boost its friends and to kneecaps its perceived opponents.  In that way, it’s worse than Solyndra, which certainly involved government intervention that benefited donors to the President.  At least so far, nothing in the Solyndra story shows the Obama administration deliberately disadvantaging Solyndra’s competitors.

Be sure to read it all.  This needs a very public airing, and hopefully the House Energy and Commerce Committee chaired by Rep. Fred Upton will force Genachowski to respond to questions already raised by Grassley.


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