LightSquared, the startup that planned a nationwide wholesale mobile network only to be shot down by regulators because of GPS interference concerns, is declaring bankruptcy.
The move came after lengthy negotiations with lenders and does not shut down the company's only commercial operation, a satellite-based mobile service. The bankruptcy is expected to give Philip Falcone, the hedge-fund chief who built LightSquared out of two satellite acquisitions, several months of control over how the company addresses its troubles.
LightSquared wanted to run an LTE mobile broadband network using frequencies next to those used by GPS, which historically had been reserved for satellite service. Part of the promise of LightSquared was the prospect of a wholesale-only provider of LTE capacity to both large and small mobile operators, potentially making the high-speed mobile business in the U.S. more competitive.
However, in February, the FCC said it would kill LightSquared's planned network because it would interfere with GPS receivers. As a result, LightSquared's main asset, its spectrum, has little value unless the company can reach another deal with the agency that would give it other spectrum to work with.
Documents detailing the bankruptcy are expected to be released later Monday.