Land Surveyor

Key FCC Staff Excluded in LightSquared Decision...What?  Why and How?

Analyst says key FCC staff excluded in LightSquared decision; Agency denies claim

1:15 p.m. Update:

The Federal Communications Commission on Friday strongly denied analyst
Patrick Comack’s claims that key agency staff members weren’t
consulted about a crucial waiver that fast-tracked billionaire Philip
Falcone’s satellite venture LightSquared.

“These are patently false allegations from an individual whose interests are
clearly compromised,” said Tammy Sun, a spokeswoman for the FCC.
“The FCC’s expert staff will continue to run an open, transparent
and inclusive process to address interference issues around
LightSquared’s proposal, which has the potential to create
thousands of jobs and generate billions of dollars of economic

In a follow-up interview Friday, Comack stood by his allegations, saying
he talked to staffers directly who told him they are “very upset”
about the waiver.

Comack, who runs an investment research company in Florida, said he doesn’t
have personal investments in telecommunications, satellite or GPS
companies. He only recommends to other clients which stocks to buy or

Comack said he has a “buy” recommendation on Clearwire, which would
compete with LightSquared. In the past, he has said he believes
Sprint Nextel will ultimately buy the company, which would reward
Clearwire’s investors.

That recommendation, he said, does not mean his interests are compromised.
In response to the FCC’s accusations, Comack said: “Why would I
lie? I’m putting myself out here.”

We revised our earlier post to be more clear about our attribution and
to move up FCC’s denial higher in the piece. Originally we said key
staff weren’t consulted in drafting the waiver. The FCC said it was
three departments that jointly drafted the waiver. We also clarified
the waiver process granted to LightSquared. Here it is:

Staff at the Federal Communications Commission told an equities analyst
they weren’t consulted about a crucial waiver
that fast-tracked
Philip Falcone’s satellite broadband venture LightSquared, the
analyst said.

The FCC denied the claims, saying its international bureau, wireless
bureau and engineering department jointly drafted the waiver.

The controversy over LightSquared has attracted more scrutiny to the FCC,
which has supported LightSquared’s mobile broadband ambitions even
as the GPS industry has warned the network would
key aviation, aerospace and other GPS technologies. Their warnings
turned out to be prescient. LightSquared has recently asked GPS
technology providers use filtering technology to avoid interference.

Patrick Comack, senior telecom equities analyst at Zachary Investment
Research, said in an interview Thursday that staff in the
international bureau told him they did not see a waiver that
was approved Jan. 26 by bureau chief Mindel de la Torre. The staff
would typically work on such a waiver pertaining to satellite
spectrum licenses.

“We don’t know how Ms. Mindel De La Torre, chief of the international
bureau, had any right to approve the waiver when her staff never
reviewed it,” Comack said. “As a matter of fact, Ms. De La
Torre’s staff is very upset about the waiver. Isn’t it ironic
that the FCC is against their own waiver?”

The FCC granted a waiver in January 2011 to LightSquared that allowed it
to build out its network but not activate it until “harmful”
interference issues with GPS were resolved. The FCC also granted a
waiver in March 2010 that allowed LightSquared to shift from a
predominately satellite business to a terrestrial commercial
high-speed mobile Internet network that would compete against
companies such as AT&T and Verizon Wireless.

GOP lawmakers are looking into the matter and are focusing on a couple
core questions: On what basis did the FCC approve LightSquared’s
conversion from a satellite to a land-based network? And why did it
do so without a full vote of commissioners?



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