"FCC Expected to OK Cellphone Use of Satellite Airwaves

"WASHINGTON—Federal officials are likely to sign off Wednesday on plans allowing a satellite broadband start-up backed by private equity fund Harbinger Capital Partners to lease its airwaves for traditional mobile phones.

The Federal Communications Commission is expected to grant a request by the start-up, LightSquared, to drop a requirement that cellphones using satellite airwaves must be able to communicate with satellites. The request would be a major victory for Harbinger, which would be allowed to lease its airwaves to wireless companies like T-Mobile, a subsidiary of Deutsche Telekom AG, for use by traditional cellphones or wireless gadgets instead of pricier satellite-enabled phones.

Lightsquared is a Virginia-based start-up funded mostly by Harbinger, a hedge fund founded by Philip Falcone, which has invested billions to launch a national broadband wireless network.

Some wireless phone companies have expressed concern about the request, since satellite spectrum has generally been auctioned off for much less money than other airwaves that are now used for cellphone service. CTIA, the wireless industry's trade group, said in December that it supports the flexible use of satellite airwaves but said the FCC should make those changes more broadly instead of helping one company.
More recently, makers and users of global positioning systems have raised concerns about LightSquared's proposal, saying that the use of those airwaves by cellphones could cause interference.

In mid-January, the Department of Homeland Security, Defense Department, Transportation Department and Commerce Department all raised concerns about GPS interference to the FCC. Granting the waiver "would create a new interference environment and it is incumbent on the FCC to deal with the resulting interference issues before any interference occurs," wrote Larry Strickling, the Commerce Department's Assistant Secretary for Communications and Information on Jan. 12, on behalf of the agencies.

FCC officials waived off government requests to postpone its approval of the waiver until after the GPS community's interference concerns had been addressed. An FCC official said the agency would set up a process "for LightSquared and the GPS community to work together to resolve the interference issue on an expedited basis." LightSquared must satisfy interference concerns before it can sell its service, an FCC official said.

A LightSquared spokesman declined to comment of the FCC's expected action.
Harbinger originally agreed to build a national wireless broadband network using Long Term Evolution (or LTE) technology that used both satellite and terrestrial airwaves. The FCC signed off on that plan last March, but only after Harbinger agreed to a last-minute condition that it would seek FCC approval before leasing airwaves to AT&T Inc. or Verizon Communications Inc., which operate the two largest wireless networks in the U.S.

FCC Chairman Julius Genachowski has said he wants to encourage more competition in the wireless phone market. The condition essentially makes it more difficult for AT&T or Verizon to lease airwaves from Harbinger's LightSquared than smaller competitors. AT&T is still challenging that FCC action.
Write to Amy Schatz at Amy.Schatz@wsj.com


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