with U.S. Senator Chuck Grassley
Q: Why have you taken on the Federal Communications Commission?
A: More than seven months ago, I started asking the Federal Communications Commission (FCC) for information that would shed light on the agency's apparent rush to approve the LightSquared project. Until public outcry, the agency was allowing LightSquared to move forward on a fast track with its plans for a nationwide wireless network, despite serious concerns of interference with the GPS systems used widely in military, aviation, emergency response venues, and even agriculture. The agency has refused to provide the public with insight into its approval process. This is of tremendous concern because the FCC controls a big part of the economy with its decisions about which companies can access highly valuable broadcast spectrum space. The FCC conducts the public's business, and the public's business ought to be public.
Q: Is there a way to make the FCC respond to your efforts for accountability?
A: To date, the FCC has provided none of the information and found excuses not to provide the information. Even the private companies involved - LightSquared and Harbinger Capital Partners (the hedge fund backing the project) - have promised to be more forthcoming than the FCC, even though the FCC is a public agency funded by the taxpayers. LightSquared and Harbinger Capital promised to provide me with requested documents on their dealings with the FCC this month. As a last resort to try to exhort more transparency and accountability from the FCC, I'll be placing a Senate hold on consideration of two nominees, a Democrat and a Republican, to serve as FCC commissioners.
Q: What's at stake beyond accountability and the integrity of the FCC's approval process?
A: This week, it was disclosed that Harbinger Capital Partners and fund owner Philip Falcone have received what's called a Wells Notice from the Securities and Exchange Commission (SEC). Last April, in my initial letter to the FCC on its decision to fast-track the LightSquared project, I noted that the hedge fund faced ongoing SEC investigations. In July, I followed up by writing a letter that asked FCC Chairman Julius Genachowski if he was concerned about these multiple SEC investigations of Mr. Falcone related to market manipulation, especially since the FCC had granted Mr. Falcone's company a $10 billion victory with LightSquared following an unusual, shortened public comment period. While the Wells Notice does not mean the SEC definitely will take action against Mr. Falcone and his hedge fund, it does show that the SEC staff believes there is sufficient evidence to consider recommending an enforcement action. Now the FCC is faced with the real possibility that it made a multi-billion-dollar grant of valuable spectrum to someone who could be charged with violating securities laws. When I raised this concern seven months ago, the FCC Chairman was dismissive. Now, more than ever, the FCC chairman should lead the effort to provide documents and offer insight into how the agency decided to give Mr. Falcone, Harbinger Capital Partners, and LightSquared this multi-billion-dollar grant. The public spectrum is a valuable asset that the Federal Communications Commission is responsible for protecting. It's unclear what would happen if a company gets access to a piece of this spectrum property and then falls apart.
Friday, December 9, 2011
