To save LightSquared from ruin, senators ask FCC to allocate new spectrum

Two U.S. senators are asking federal regulators to reconsider their decision to forbid of troubled startup LightSquared from launching its high-speed wireless network.

LightSquared’s business strategy involved building out a high-speed wireless network that would generate revenue by selling network access to outside companies, such as Walmart, Best Buy, and others. In February, however, the Federal Communications Commission (FCC) rejected LightSquared’s plans to launch its LTE network due to concerns that it would interfere with both commercial and military GPS technology. Because of this development, several high-profile clients — such as Leap Wireless, FreedomPop, and Sprint-Nextel —  terminated their service agreements with LightSquared. The startup and its investors stand to lose billions if a solution to the interference problem isn’t found that is satisfactory to the FCC.

In response to LightSquared’s turmoil, Senators John Kerry (D-Mass.) and Lindsey Graham (R-S.C.) have asked FCC Chairman Julius Genachowski to allocate a different portion of spectrum to LightSquared, which would solve the GPS interference problems.

“In the short-term, we urge you to work with industry and the relevant federal agencies to find consensus on alternate spectrum for LightSquared’s proposed network,” the senators wrote in a letter obtained by The Hill. “Advancing LightSquared’s network in a consensus manner would increase competition in the wireless broadband market and promote the public interest.”

More recently, LightSquared investors are contemplating filing for voluntary bankruptcy, which could be the only option the startup has if a solution to the interference problem isn’t found soon.