Game Over: LightSquared Goes Bankrupt
May 14, 2012 7:44 PM
comment(s) - last by
Death of satellite LTE project essentially sealed the firm's fate
economics grad and billionaire venture capitalist, has seen his hopes to deliver 4G satellite LTE crash and burn. Despite his fortune, Mr. Falcone had to dig deep to scrounge up $5B USD in extra venture capital to pay for the world's largest communications satellite in history -- the 5.4 ton SkyTerra 1.
Launched in 2010, all was going glorious for Mr. Falcone and his new venture LightSquared. Soon they had
worked out a $9B USD deal
with Sprint Nextel Corp. (
) to deploy a terrestrial LTE network to complement the satellite offerings. Together the terrestrial + satellite solution was expected to dominate the LTE market when it launched sometime around 2013.
But optimism surrounding the
U.S. Federal Communications Commission
's conditional approval of LightSquared's satellite LTE turned to dismay when the U.S. Air Force revealed that it would interfere with
an estimated 75 percent of commercial and government GPS units
LightSquared's doomed LTE bid involved a record-setting 5.4 ton satellite. [Image Source: Boeing Comp.]
And just in case rendering navigation useless across the continental U.S. wasn't enough of a death sentence, the SkyTerra 1 bid became
an intensely politicized issue
when it was revealed that LightSquared's legal team had pressured the White House chief of staff, reminding him of the millions Mr. Falcone had raised for President Barack Obama's election bid. Many believe those donations led to a hasty conditional approval by the FCC, overlooking interference concerns.
But in the end those contributions were for naught because even the friendly Obama administration was
forced to kill LightSquared's proposal
. Sprint, upset at losing a key part of the service, also terminated its contract with LightSquared.
With no terrestrial deployer, billions in debt, and a defunct multi-ton hunk of metal floating in orbit, the latest entry in this story is perhaps a predictable one -- LightSquared has filed for Chapter 11 protection in
New York's Southern District Court in New York
The bankruptcy spells dire news for hedge fund Harbinger Capital Management, as well as Mr. Falcone. The perhaps ironically named hedge fund was a deep investor in LightSquared and joined Mr. Falcone in trying to propose stop-gap deals to placate creditors who grew increasingly unsettled in the wake of the satellite deal collapse.
The LightSquared failure is the first major defeat for venture capital whiz Phillip Falcone.
[Image Source: Jacob Kepler/Bloomberg/Getty Images]
Most of LightSquared's staff has already jumped ship, so at this point creditors may be left picking at a carcass.
LightSquared's marketing chief Frank Boulben has gone from one bankruptcy candidate to another, becoming the
new chief marketing officer (CMO) for money-losing Canadian phonemaker Research in Motion
, Ltd. (
). CEO Sanjiv Ahuja, stepped down in February.
With the bankruptcy filing LightSquared and its ambition to become a fifth major American wireless service provider are -- for all intents and purposes -- dead. The company's meteoric rise and bizarre fall stand as a cautionary tale to those who might wish to cut corners to establish themselves as a competitive service provider.
This article is over a month old, voting and posting comments is disabled
RE: Not Surprising
5/15/2012 2:49:21 AM
Why oh why did this even get launched, or even past component testing phases?
I'm a bit confused.
RE: Not Surprising
5/15/2012 4:52:42 AM
They jumped the gun. The FCC doesn't oversee the launch phase of satellites. But any physicist at Light Squared (clearly there were none) would have told them that this thing would most definately cause chaos on the ground by saturating near the GPS spectrum, which is generally very low radiation and requires very high sensitivity.
This is sad, but not surprising. Too bad it can't be re-tooled for another spectrum without a relaunch.
RE: Not Surprising
5/15/2012 8:22:48 PM
maybe they can point the antennas toward the moon... you know, for Newt Gingrich's moon base.... ;)
"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings
RIM Puts LightSquared Castoff in Charge of Marketing; Airs Vague Ad Pitch
May 8, 2012, 4:10 PM
LightSquared's GPS-Crippling 4G Bid is Sunk by the FCC
February 15, 2012, 1:18 PM
LightSquared Wireless Service Signals Interrupt 75 Percent of GPS Receivers
December 12, 2011, 1:00 PM
Sprint Enters Agreement to Deploy LTE Services, WiMAX Left in Limbo
July 28, 2011, 4:32 PM
Man Who Shot Father for Texting During Movie Previews Was Also Texting
March 14, 2014, 2:25 PM
Sony's PS4 Outsells Microsoft's Xbox One for February
March 14, 2014, 12:36 PM
Skrillex Releases Free Album Inside App, But Crashes Torture Fans
March 13, 2014, 8:04 PM
Microsoft Waives Windows Phone OS Licensing Fees for Two Hardware Makers in India
March 13, 2014, 1:07 PM
Huawei Says Windows Phone is "Low Priority", Relegates It to Dual OS
March 13, 2014, 11:21 AM
$1,200 Nikon 1 V3 Mirrorless Camera Offers 120fps Slow Motion Capture
March 13, 2014, 9:04 AM
Most Popular Articles
Bitcoin King Pt. II: Mt. Gox's Dictator Karpelès Proves Tragically Flawed
March 7, 2014, 1:12 PM
Hack Reveals Fallen Bitcoin CEO's Posh Tokyo Penthouse
March 10, 2014, 4:28 PM
Tesla Motors Calls New Jersey Out on New Rule Against Its Direct Sales Model
March 11, 2014, 12:01 PM
NASA Considering SpaceX "Red Dragon" for Returning Mars Samples to Earth
March 10, 2014, 2:43 PM
India Could Rock Google With Its Biggest Antitrust Fine Yet -- $5B USD
March 10, 2014, 8:12 PM
Latest Blog Posts
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
Is The Period Becoming an Expression of Anger?
Nov 26, 2013, 2:02 PM
NSA and Congress -- You Will Never Kill the Constitution, It's an Idea
Nov 10, 2013, 2:00 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information