It’s been a while since we looked in on LightSquared, the firm that wanted to roll out a terrestrial cell network on a part of the spectrum reserved for low-powered satellite transmissions.  The FCC gave LightSquared, a firm with significant connections to Barack Obama, a temporary waiver to proceed while testing took place to see whether it would interfere with GPS systems, an outcome the Department of Defense and the FAA both insisted would happen.  Sure enough, after spending a fortune, testing showed that LightSquared transmissions would swamp out commercial, aviation, and defense GPS systems — an outcome the FCC could have determined right off the bat, had it chosen to do the testing itself.

Yesterday, LightSquared filed for bankruptcy protection, but that’s not necessarily the end of the story:

LightSquared, the wireless startup that has run into opposition from federal regulators, filed for Chapter 11 bankruptcy on Monday.

Philip Falcone and his investment firm Harbinger Capital invested billions of dollars in LightSquared’s plan to build a high-speed wireless network that would have served more than 260 million people, but federal regulators denied it permission to launch earlier this year.

In a statement, Marc Montagner, the company’s chief financial officer, said the filing “is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network.”

Yes, the firm still wants to roll out its network, even though the FCC found “no practical way” to solve the interference problem short of throwing consumers, commercial airlines, and the military under the bus.  LSQ only has a couple of options in this regard.  One way is through the courts, which LSQ has already hinted they will go, claiming that the temporary waiver from the FCC have the firm some level of commitment to their system and that they were being punished for the shortfalls of GPS manufacturers (see links below for more on that argument), even though the waiver clearly stated that LSQ had to show that their systems would not interfere with established GPS systems, a condition to which LSQ agreed.

The other way?

The wireless group had contracts with three lobby firms in the first quarter of 2010, compared to 14 by early 2012. It spent $695,000 on K Street in 2010, compared to nearly $2.8 million in 2011.

LightSquared’s lobbying line-up has been star-studded, thanks to contracts with firms that employ influential former lawmakers. Former congressman Dick Gephardt (D-Mo.) and former Pennsylvania Gov. Ed Rendell (D) are among those who have lobbied for LightSquared.

The K Street blitz has continued in 2012. The now-bankrupt company spent more than $1 million during the first three months of this year on 14 lobbying powerhouses, public disclosures show. Only two of those 14 firms disclosed terminating their contracts with LightSquared in the first quarter of this year despite the firm’s financial woes.

LSQ went on a lobbying blitz to pressure Congress into forcing the FCC to approve the network.  That lobbying blitz didn’t get limited to Congress, either, as I first reported in December, but also included state legislatures such as ours in Minnesota.  Those efforts didn’t work either, and it’s difficult to see how they could have worked with the crystal-clear test results demonstrating that the variance LSQ needed on transmission strength would have forced every person with a GPS device to replace it with something more expensive and less useful.

LSQ chose Chapter 11, a reorganizing effort, rather than Chapter 7, a shutdown, which indicates that they will still try to get their network on the ground.  They’d better come up with a plan to buy spectrum in the same way other 4G operators have had to do, because their efforts to use their satellite spectrum aren’t going any farther than they have up to now.