LightSquared Makes Last-ditch Case to FCC

 - March 2, 2012, 5:50 AM

Despite rising jubilation among the GPS community in the middle of last month that LightSquared had at last met its comeuppance, the would-be nationwide wireless broadband provider was not dead yet as this issue went to press. With its technical arguments virtually exhausted, LightSquared entered into a “Pleading Cycle” at the FCC on January 27, using what is likely its only lifeline.

Simply put, in a Pleading Cycle opposing parties have reached something like a technical standoff, and one side feels that there are still points of law or precedents that can demonstrate the legality of its claims, in this case LightSquared’s contention that the GPS community is in the wrong. Counsel for the GPS side must counter by demonstrating that such laws or interpretations are not applicable.

Pleading Cycles are unusual–but apparently not at the FCC, which deals with telecom fights that involve big money–since in most civil cases the evidence introduced is sufficient to dispense with an analysis of the actual wording and true intent of the relevant law. But in law, even quite innocuous words can be said to have meaning beyond the obvious. As one high-profile person once testified, “It depends on what the meaning of the word ‘is’ is.” It appears that formal pleading can take interpretation to that level.

And in the LightSquared case, the stakes are indeed unusually high. If the company loses its plea, owners and shareholders could lose a substantial part of the original $3 billion investment, as speculators in distressed firms have already begun to pick away at LightSquared’s now heavily discounted share holdings. Winning, on the other hand, could bring in a bounty of more than $12 billion to owners and investors, it is reported.

For the GPS side, losing would wreak havoc among the estimated one billion GPS users worldwide, while winning can only hasten action by the international community to ensure that appropriate legislation will forestall this situation from ever rising again.

Nevertheless, while the recent Congressional testimonies of government and industry officials appear to have made an indisputable case for the GPS side, there remains the possibility that LightSquared’s legal consultants might find a loophole in the law and win their case. Sometimes, as Charles Dickens’s Mr. Bumble ungrammatically declared, “the law is a ass–a idiot.” Let all who trust in GPS trust that the consultants don’t succeed.

All legal comments from each side during the 30-day Pleading Cycle were to be submitted by February 27, with the parties required to file their responses to the comments by March 13. Following that, at a date not yet announced, the FCC will deliver its ruling.