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Remember the Solyndra scandal? Solyndra was a shaky solar panel company backed by the Department of Energy through a process “infused with politics at every level.” When Solyndra finally collapsed, it left taxpayers liable for $535 million in federal guarantees.
Solyndra pales in comparison to what’s at stake with LightSquared, another shaky company that went bankrupt after betting on billions of dollars in government benefits. The Federal Communications Commission (FCC) initially doled out government benefits to LightSquared in 2010, when a trio of agency bureau chiefs illegally granted LightSquared a nationwide cellular license in a spectrum band allocated for satellite communications. LightSquared wanted to convert the satellite frequencies into far more valuable cellular spectrum, “much as a developer would use a change in zoning to make land more valuable,” but its plan backfired when a host of other government agencies and companies proved that LightSquared’s proposed network would interfere with the Global Positioning System (GPS).
Now that it’s ready to emerge from bankruptcy, LightSquared’s new lobbyist, Clinton Administration alum and Obama bundler Reed Hundt, is urging the FCC to grant LightSquared another cellular license illegally. It’s deplorable enough that LightSquared is asking FCC Chairman Tom Wheeler to knowingly ignore the law. But there is more at stake here than Wheeler’s integrity. LightSquared’s most recent proposal still threatens the reliability of GPS signals that are critical to the military, aviation and public safety and commercial communications systems.
Congress and government watchdogs should keep a sharp eye on the way Wheeler handles LightSquared. Wheeler can uphold the public interest by following the requirements of the law or he can pursue his own political interests by granting LightSquared another special favor at the agency's bureau level. The choice he makes will tell us much and more about the FCC’s decisionmaking process under his watch.
There were myriad procedural irregularities surrounding the 2010 orders granting LightSquared a free cellular license, but one error is definitive: The bureau chiefs that signed the orders had no authority to issue them — nada, none, zip — because the orders' purported authorization of LightSquared’s proposed cellular network violated binding international and domestic laws governing spectrum allocations. Specifically, a given radio frequency band can be used only in accordance with the purposes specified in the formal table of frequency allocations, and the table doesn’t permit the deployment of a nationwide cellular network in LightSquared’s frequencies.
There are sound reasons for ensuring that spectrum users comply with published allocations. Spectrum planners use allocations to prevent conflicting uses of radio frequencies just like land-use planners use zoning to prevent conflicting developments (e.g., the operation of a meat processing plant immediately adjacent to a residential neighborhood). The table of frequency allocations generally groups similar spectrum uses into technically harmonious “neighborhoods” to avoid the potential for incompatible systems to interfere with one another. Satellite allocations are typically in neighborhoods that are separate from cellular allocations because nationwide cellular networks are generally not compatible with low power satellite communications.
Just as developers can sometimes obtain a zoning variance to permit a special land use, the FCC can authorize a use of frequencies that is inconsistent with the table of frequency allocations, but only if certain conditions are met. One of those conditions is that the inconsistent use be approved by the FCC Commissioners in a rulemaking proceeding (with the exception of temporary authorizations granted during emergencies like Hurricane Katrina). FCC rules forbid bureau chiefs from authorizing inconsistent spectrum uses in adjudicatory proceedings or for the purpose of developing a permanent, non-compliant service — which is exactly what the bureaus did in the 2010 orders purportedly granting LightSquared a nationwide cellular license.
If Chairman Wheeler wants to authorize LightSquared’s proposed cellular network in a manner that complies with due process and the rule of law, he needs to initiate a rulemaking proceeding and address the issue along with his Commissioner colleagues, not ram an illegal order through the bureaus like his predecessor.
The illegitimate process used in the 2010 orders was one reason the GPS interference issues couldn’t be resolved and LightSquared declared bankruptcy. Politics are a poor proxy for the technical work required to solve complex engineering and economic issues involving spectrum.
Unfortunately, there hasn’t been much progress on resolving LightSquared’s interference issues during its bankruptcy proceeding. The Department of Transportation, the lead civilian agency within the U.S. Government on GPS matters, recently reiterated its concern that the FCC lacks the information necessary to determine that LightSquared’s proposed deployment will not cause unacceptable interference to GPS signals, in part because obtaining that information requires additional testing in cooperation with government agencies and that testing hasn’t been done.
Chairman Wheeler has an opportunity to correct the mistakes of his predecessor with respect to LightSquared and reaffirm the agency’s role in upholding the law and serving the public interest. If he instead follows in his predecessor’s footsteps and tries to grant LightSquared a cellular license without a rulemaking, Wheeler would confirm that the FCC has become an instrument for serving political interests that is undeserving of the public’s confidence in its expertise or impartiality.
