US senator set to let FCC nominees go forward despite LightSquared worries

Sen. Chuck Grassley had threatened to block a Senate vote on two nominees because the FCC would not give him documents

U.S. Senator Charles Grassley plans to drop a hold he placed on two FCC nominees because of a tussle with the agency over documents related to its treatment of would-be hybrid mobile operator LightSquared.

Last year, Grassley had sought all the U.S. Federal Communications Commission's records about its dealings with LightSquared because of suspicions that the agency gave the company preferential treatment. The FCC would not hand the documents over to him because he doesn't sit on a committee that regulates it. In response, Grassley said he would block a full Senate vote on the nominations of Jessica Rosenworcel and Ajit Pai, who were proposed last November for empty seats on the commission but must still be confirmed by the Senate.

Subsequently, the House Energy and Commerce Commission asked for and received the documents and gave them to Grassley. On Friday, one year after his initial request, Grassley said he intends to drop his hold on the nominees.

Grassley was probing whether LightSquared, which wants to operate a 4G LTE mobile network next to the GPS frequency band, had traded political contributions for preferential treatment at the FCC. The Commission is part of the executive branch of government and led by Chairman Julius Genachowski, who was appointed by President Barack Obama. Grassley is a Iowa Republican.

The senator also raised concerns about a U.S. Securities and Exchange Commission probe of Philip Falcone, the hedge-fund investor who is LightSquared's main financial backer.

In a statement on Friday, the senator veered away from his accusation of influence-peddling but raised a new concern, warning that the FCC should not be a "cheerleader" for certain proposed projects.

"So far, the documents I have seen begin to give some answers about why the FCC gave such fast preliminary approval to LightSquared," Grassley wrote. "The documents show that rather than being an objective arbiter, the commission appeared to be enthusiastic about the LightSquared project and wanted to see it materialize.

"It may be that the FCC was so intrigued by the prospect of a new broadband provider that it overlooked technical concerns or the financial implications if the project's chief investor were to undergo SEC sanctions," Grassley wrote.

Grassley said his investigation is not over because there are more documents to examine. "However, since there is now a process in place to obtain all of the relevant documents from the FCC, I intend to lift my hold on the two FCC nominees," Grassley wrote.

In February, the FCC said it would kill LightSquared's planned LTE network because tests showed it would interfere with GPS. "I hope the pending nominees, and the rest of the commission, will use the LightSquared situation as a case study in what not to do," he wrote.

Farming interests are among the opponents of LightSquared's plan, because automated farming equipment uses GPS for guidance. Grassley represents Iowa, an agricultural state where farm equipment maker John Deere has several facilities.

Falcone said recently that he is considering seeking bankruptcy protection for LightSquared. According to a Wall Street Journal report on Friday, some of the company's lenders are trying to remove Falcone as the public face of LightSquared because they believe he has made it harder to deal with federal regulators.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

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