As I posted earlier Senator Barack Obama sunk $50,000 into Skyterra which is the name LightSquared went by before it was acquired by Philip Falcone of Harbinger Capital. He had to have had some familiarity with the company. The rest of his investments were in mutual funds and Skyterra was a small over the counter stock. He did acquire one other stock that went on to get a government contract but that's a subject for another post. He had known Julius Genachowski since law school days and installed him has Chairman of the FCC. Genachowski had acquired some technical expertise as counsel to the FCC during the Clinton years but he is a lawyer, entrepreneur, and political operative not a technocrat. As mentioned earlier Donald Gips, who went on to be an ambassador to South Africa also knew of the LightSquared scheme. Harbinger Capital is a private company and does not have to disclose its investors so if one was inclined to do a little double dealing it would be impossible to detect without a subpoena. As early as the 2008 Obama had identified the need to extend broadband coverage to the most remote parts of the country. People still using dial-up internet service became part of the "undeserved community ", that mindless catch-all of the left that needs everything from organic foods to baby diapers. It is conceivable that candidate Obama had LightSquared in mind even then.
The radio spectrum LightSquared hoped to use was acquired by Skyterra for satellite use. During the Bush administration the FCC had allowed ancillary terrestrial use. That is, it allowed Skyterra to supplement its satellite signal with terrestrial signal thus filling holes in the satellite coverage. Just by stretching that loophole to it maximum Genachowski could allow LightSquared to become a full fledged 4G operator without it ever having to compete in auctions with Verizon, ATT, Sprint, and other telecommunication companies for precious radio spectrum. In effect LightSquared would get a $10 billion gift from the US taxpayers. This is where, if I were writing a comedy script, things get funny. Imagine a bunch of lawyers trying to build a phone company with a partner they really shouldn't have trusted. The White House must have thought all this could have been done quietly. As news about LightSquared's intentions began to leak out the GPS community went ballistic. As did the Department of Defense and the FAA. Still the White House seemed unaware of the technical impediments to this so very, very clever scheme. It seemed to get technical advice from only LightSquared who assured them that filters, still undeveloped at this date, would cure what ails the critics. Besides the FCC was an independent agency and the White House had no authority to intervene. LightSquared lawyer, Henry Goldberg emailed the White House a draft they were preparing for the FCC that pointed out the jobs and economic development the network build out would produce and noted it took the concerns of the GSP community very seriously but only a "small number of devices may actually be subject to the interference".
When Peter L. Levin, the chief technology officer for the Department of Veterans Affairs. warned White House Chief Technology Officer Aneesh Chopra and two other senior White House aides in a March 26, 2011 email of a “catastrophe” from GPS interference it must hit the administration like a bolt of lightening. LightSquared has offered the Department of Defense $50 million to retrofit its GPS equipment which it has yet to accept but the Coalition to Save Our GPS is claiming a loss of 3.3 million jobs and annual lost benefits of $96 billion. Probably the clever people in the White House would like a "do over" on LightSquared and the impending scandal but when the book is written on this fiasco Obama and Genachowski are going to come off looking like Ralph Kramdem and Ed Norton.
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