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Bid could help Charlie Ergen build a top U.S. carrier -- with or without Sprint Nextel

The fall of LightSquared and hedge fund manager Phillip Falcone was well documented.  For a time it looked like the service provider would become a key partner to Sprint Nextel Corp. (S) with its ambitious satellite LTE scheme.  

Then came the news that the satellite transmissions would interfere with roughly 75 percent of global positioning service (GPS) receivers -- a debacle that caused the U.S. Federal Communications Commission to reject LightSquared's bid in the eleventh hour, despite giving a conditional approval that critics say was bred from Mr. Falcone's close relationship with the Obama administration.  In the aftermath of the FCC rejection, Sprint dumped LightSquared, LightSquared went bankrupt, and Mr. Falcone was accused of defrauding investors.

But the company still holds valuable spectrum, and in the midst of its Chapter 11 bankruptcy it reportedly has received a major bid for that spectrum that could help Mr. Falcone trim his losses and pay of debt, relieving bitter shareholders.

The bid for spectrum was first reported by Bloomberg and is reportedly the work of DISH Network Corp. (DISH) CEO, chairman, and founder Charlie Ergen.

Charlie Ergen
In the midst of his bid for Sprint, DISH CEO and founder Charlie Ergen is looking to make LightSquared's spectrum holdings his latest chunk of acquired spectrum.
[Image Source: AllThingsD]

Mr. Ergen has been aggressively buying spectrum for some time now, dreaming of founding a large U.S. cellular carrier.  Mr. Ergen is currently competing with Japan's fastest growing mobile carrier, Softbank Corp. (TYO:9984) to buy Sprint.

A judge must approve the so-called "stalking-horse agreement" (a bid that sets the minimum price for an auction-style sale), and the deal must be agreed to before the end of the month, according to Bloomberg's sources.

In March LightSquared entered an armistice of sorts with shareholders, obtaining a small $5M USD loan in exchange for moving ahead into Chapter 11 bankruptcy.  Mr. Falcone last week also settled up with the U.S. Securities and Exchange Commission, paying a $18M USD fine for alleged borrowing $113M USD from one of his hedge funds to pay his taxes.

Mr. Ergen's DISH already has received permission to set up a cellular network from the FCC.  So if his bid for Sprint fails, he may opt to enter the market anyways, using his horded spectrum to establish a fifth major U.S. carrier brand.

LightSquared is still hopeful that some of the spectrum it owns can be used for cellular networks (and hence of value) via the use of protective "buffers" around its portion of spectrum bordering the GPS blocks.

Source: Bloomberg

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The Jason Mick Drinking Game Continues!
By arthur449 on 5/21/2013 8:41:38 AM , Rating: 3
Each time you encounter a link within one of Jason's articles to another one of Jason's articles... drink!

RE: The Jason Mick Drinking Game Continues!
By Flunk on 5/21/2013 9:52:37 AM , Rating: 2
Oh no, that's a terrible idea. It's recursive and each flows to another. Next thing you know you're in the hospital.

By arthur449 on 5/21/2013 10:00:37 AM , Rating: 2
Nonsense! Recursive drinking games only lead to a mild case of death.

RE: The Jason Mick Drinking Game Continues!
By JasonMick on 5/21/2013 5:37:42 PM , Rating: 2
Each time you encounter a link within one of Jason's articles to another one of Jason's articles... drink!
I am not responsible for your death.

By DarkUltra on 5/21/2013 6:53:00 PM , Rating: 2
Dear Sir,

You're either part of the solution or you are part of the problem.

"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher

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