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AT&T and Verizon are working “behind the scenes” to stamp out new 4G wireless entrant LightSquared, according to billionaire hedge fund manager Philip Falcone.
Falcone, speaking to CNBC today, claimed the two telecommunications giants aren’t competing fairly and are using their power to undermine LightSquared, which is run by Falcone’s Harbinger Capital.
LightSquared is attempting to build a nationwide 4G LTE network that it will sell on a wholesale basis to other carriers that want to resell its services. But the company has run into a major hurdle with a coalition of companies reliant on GPS equipment. They claim LightSquared’s spectrum interferes with the operations of everything from farming equipment to airplane systems.
Falcone claims an AT&T lobbyist is heading up the GPS coalition. He added the carriers are pressuring local officials to throw their support behind the GPS camp.
The carriers were quick to refute Falcone’s claims. Both companies have worked on the GPS issue through the Federal Communications Commission, but both denied attempting to squash LightSquared.
“AT&T has no relationship whatsoever with the GPS Coalition (or any other group for that matter) active on LightSquared’s issues,” said Robert Quinn, senior vice president of federal regulatory and chief privacy officer. “Indeed we welcome the competition from LightSquared and have cited LightSquared’s competitive presence, bolstered by the recent deal it announced with Sprint, in our Public Interest Statement supporting our merger application at the FCC.”
Verizon: “Our filed comments in the public record reflect that constructive perspective, and that perspective alone. We have no involvement in any attempt to derail any company from participating in the wireless service sector.”
LightSquared has put out an alternative plan that would use a different swath of spectrum that eliminates much of the interference concerns, but the GPS coalition has said the plan isn’t sufficient.
Related links:
LightSquared to FCC: We can fix GPS issues
LightSquared: The answer to U.S. wireless competition?
Sprint, LightSquared unveil network-sharing deal
The company is seeking approval from the Federal Communications Commission to use the spectrum after filing the alternative plan. It also signed a deal with Sprint Nextel to let the wireless carrier host and manage its 4G network using the Sprint infrastructure.
Falcone, however, said the GPS industry has had years to prepare for the eventual conflict in spectrum use, and never did. He noted that the FCC has mandated the use of the spectrum for wireless service.
“The reality is there has been a gross misinterpretation of the facts in the marketplace,” he said.
Falcone also addressed the recent downturn in the market, saying he would still invest in America.
“There’s a lot of work to do, but it is an economy that I would put my money in,” Falcone said. He added that the sell-off today was a “knee-jerk reaction” to concerns that the economy may not recover in Europe. He said today represents an opportunity to wade back into the market.
In regard to the economy, he noted that LightSquared would create an estimated 15,000 jobs annually over the next three years.
Updated at 3:18 p.m. PT: Includes comments from AT&T and Verizon.
