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Posted at 6:19 PM ET, 01/26/2011

FCC grants LightSquared approval to use satellite airwaves for cell phones

By Cecilia Kang

The Federal Communications Commission on Wednesday approved a request by LightSquared, a satellite firm financed by hedge fund billionaire Philip Falcone's Harbinger Capital, to lease airwaves for consumer wireless gadgets.

The FCC's decision allows Reston-based LightSquared to proceed with its ambitious plans to build a high-speed Internet network from satellite feeds. The service is aimed at companies, such as Apple and Best Buy, that may want to offer mobile devices without partnering with major carriers.

Specifically, the FCC's action allows LightSquared to lease on-the-ground cell phone service to customers without also having to sell satellite services.

"The FCC's grant of this application is an essential building block for our network as we build out to meet the rigorous construction timetable," LightSquared said in a release.

With more than $1 billion in debt and a $7 billion commitment by Nokia to build the ground network, LightSquared has promised investors and regulators to deliver a network covering up to 100 million Americans by the end of 2012 and 260 million by 2016.

The FCC sees LightSquared's plan as a way to introduce more competition into the market for high-speed wireless Internet services. Companies that provide global positioning systems opposed the FCC waiver, saying more time is needed to resolve concerns that LightSquared's service could interfere with their satellite-based offerings.

Government agencies such as the Defense Department and Commerce Department have expressed similar concerns. The FCC granted its waiver on the condition LightSquared resolve the concerns of GPS providers. LightSquared has promised to work with GPS providers and give the FCC monthly updates on a resolution to interference concerns.

By Cecilia Kang  | January 26, 2011; 6:19 PM ET
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