LightSquared, one of the worst ideas in the history of technology, may file for bankruptcy. The firm was to provide wholesale 4G service across the U.S. The notion failed to recognize that each of the three major wireless companies has already deployed 4G.
LightSquared’s slim prospects were deeply wounded when the FCC determined that the firm’s signal interfered with GPS ones. It was not LightSquared’s fault. GPS providers have taken up more bandwidth than allowed. But, GPS had become a big business, and the FCC knew it could not ruin the prospects of products that operated in almost every car and smartphone.
LightSquared has been financed by disgraced fund manager Philip Falcone, the head of Harbinger. Falcone has recently come under scrutiny by the SEC for actions taken based on distributions of money from the fund. Harbinger’s investment in LightSquared has helped push the value of the fund down by 50%.
LightSquared pushed out its CEO a month ago and said it would look for a new one. Based on the company’s prospects, that was nothing more than a dodge. No chief executive could have the means to turn the firm around.
According to CNBC which broke the story:
Hedge fund manager Philip Falcone said in an interview on Wednesday he is “seriously considering” filing a voluntary bankruptcy for LightSquared, the struggling telecom startup in which his Harbinger Capital Partners is the majority owner.
It will not matter. The company is up against Washington bureaucracy, and its business is based on flawed assumptions that the country needs more high-speed wireless.
Douglas A. McIntyre