Airlines Group Testifies Against LightSquared Network

An airlines industry trade group, Airlines for America (A4A), has come down hard on the wireless network proposed by LightSquared Inc. and its principal backer, Philip Falcone of Harbinger Capital Partners. The industry argues that the proposed network interferes with the global positioning system (GPS) that airlines depend on for navigation.

A4A’s senior vice-president testified before a US House subcommittee today, telling members:

With respect to the LightSquared proposal, the incontestable fact is that it will create widespread GPS interference, which will have ruinous effects on aviation. Experts have repeatedly reached that conclusion. LightSquared’s proposal therefore should be withdrawn. This matter needs to be put to rest once and for all.

Last year, Harbinger wrote down more than half of its $3 billion investment in LightSquared, pushing the hedge fund’s loss to -47% for 2011. LightSquared has proposed some solutions to the GPS interference issue, but a US Transportation Department official has described the proposals as failing to answer “fundamental questions of incompatibility.”