In another blow to the supposed wisdom of crony-capitalism, LightSquared has filed for Chapter 11 bankruptcy protection as science and reality trumped political pull, at least for now.
As you may recall from earlier posts (notably this and this), LightSquared was at the heart of several controversial moves by the FCC, who proposed shifting the company's license to use radio spectrum it had licensed for satellite broadcasting for terrestrial services, and violating standard administrative procedures in closing that rule making process immediately afterwards (normal process is a 3-12 month process of announcements, opportunity for public comment and competitive filings). Analysts speculated that the FCC action added billions to the company's value, and critics noted that many leading Democrats had invested in the company, and that its CEO was a heavy contributor to campaign funds and a regular visitor to Capitol Hill and the White House.
The technical side of the problem was that those particular frequencies were widely used for GPS systems (an estimated 80-90% of civilian and military GPS devices used those frequencies), and that terrestrially based services were likely to interfere with their operation. After first responding to concerns with a virtual shrug and suggestion that all those GPS users would just have to buy new devices that operated using other frequencies. After the inevitable public relations disaster of that move, they announced that a series of proposed quick fixes, only to have leading experts (as well as FCC engineering staff) declare that they wouldn't work.
Eventually, the FCC had to recognize that the current LightSquared plans were not viable, and they shelved their application. In the meantime, LightSquared is appealing the decision, and trying to find a solution to the GPS dilemma - the Chapter 11 move will give it more time to find a solution, if not to its proposed frequency move, then at least to pay off creditors.
Source - LightSquared files for bankruptcy protection, Telecoms.com