Documents: LightSquared shaping up as the FCC’s Solyndra

On April 12, 2010, just one week after Gips cashed in his personal stock, the Public Interest Spectrum Coalition – a left-wing group comprised of the New America Foundation, Free Press, Media Access Project and Public Knowledge — filed comments with the FCC opposing efforts to reconsider part of the agency’s decision to allow the Harbinger–SkyTerra merger. That coalition wanted to preserve the FCC’s requirement that LightSquared would not provide spectrum to AT&T and Verizon without prior FCC approval.

Left-wing billionaire George Soros is reported to have $200 million invested in Harbinger. His Open Society Institute has donated more than $1 million to the four groups that comprise the Public Interest Spectrum Coalition.

Shortly after the Soros-funded groups began applying pressure to the FCC, on April 21, 2010 Republican Sens. Jim DeMint, Sam Brownback, David Vitter and Kay Bailey Hutchison wrote to FCC Chairman Genachowski raising questions of their own. The senators were particularly concerned about the condition in the deal that forced LightSquared to deny AT&T and Verizon spectrum without prior FCC approval. The FCC, they said, hadn’t involved or notified third parties that would be directly affected by the conditions of the deal. They were also concerned that the FCC had concluded the deal at the bureaucratic staff level, without involving a vote by the commissioners.

Genachowski didn’t respond until May 10, and answered none of the GOP senators’ specific concerns in his reply.

On the day before the Republican senators wrote Genachowski, representatives from the Soros-funded Public Interest Spectrum Coalition met with FCC Commissioner Michael Copps to reiterate their opposition to allowing LightSquared to sell spectrum to Verizon and AT&T. The group followed up with an official letter to the FCC on the matter the next day, April 21, 2010.

But in another indication of the FCC’s interest in helping Falcone and his allies at the expense of other stakeholders, the FCC handled the public disclosure of concerns from those on one side of the debate differently from those on the other side.

Though those GOP senators had sent their letter to Genachowski on April 21, 2010, and Genachowski had responded on May 10, 2010, the letter and the FCC chairman’s responses were not published in the FCC’s electronic comment filing system until June 1, 2010. In its electronic records database, the FCC also says it didn’t receive the GOP senators’ letter until May 24, 2010, two weeks after Genachowski had already responded to them.

The letter and the FCC chairman’s response were, however, posted on the FCC’s Office of Legislative Affairs website on May 20.

But the letter from the Soros-funded groups, which was sent to the FCC on the same day as the GOP senators’ letter, was posted in the official electronic records database for public viewing almost immediately — on April 21, 2010, the same day it was sent.

AT&T and Verizon, shocked by the deal, sent scathing comments via their attorneys, questioning the reasoning behind the FCC’s decision.

“Although it is impossible to know what motivated the Commission’s insistence on merger conditions penalizing AT&T and Verizon — since neither the Bureau Order nor any public filing in the proceeding even addresses the issue — there is no possible justification for these conditions,” AT&T’s attorneys wrote, asking the FCC to reconsider the deal’s conditions.

While there is no clear evidence pointing to exactly why the FCC penalized Verizon and AT&T, the publicly stated goals of those Soros-funded organizations that supported the move may be a clue. They believe wireless spectrum “belongs to the public,” and should be subject to as little corporate influence as possible. Their goal is to create a community-oriented, taxpayer-subsidized and highly regulated broadband system, essentially making Internet access a public utility.

The LightSquared plan appears to fit the bill of what Soros’ allies wanted. And after the plan was underway, Goldberg — one of Harbinger’s lawyers — emailed the contact he and Falcone met with inside Obama’s White House just a few months earlier.

“It’s happening,” Goldberg emailed Kohlenberger on July 20, 2010. “Thanks for your help and encouragement. As we bolt together the network, we’ll come in with details.”

“Congrats,” Kohlenberger replied. “Very exciting.”

This article was updated after publication to reflect that a 1999 donation by Philip Falcone to George W. Bush’s presidential campaign may have been from another individual with the same name, not the Philip Falcone who is among the subjects of this story. Also, the Center for Responsive Politics data The Daily Caller cited indicated that former Harbinger Capital partner Howard Kagan was still employed at the hedge fund when he made his $50,000 donation to Obama’s inaugural committee. This is not the case.

A further update was made to clarify minor points including the sequence of events related to the posting of documents in the FCC’s publicly available electronic comment filing system. 

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