UPDATE 1-LightSquared eyes ex-Nextel head for CEO job - source

Wed Feb 29, 2012 5:38pm EST

* Donahue has experience dealing with Washington

* FCC extends comment period to March 16 in proceeding

NEW YORK Feb 29 (Reuters) - LightSquared, the beleaguered telecom startup founded by hedge fund manager Philip Falcone, is considering hiring telecommunications veteran Timothy Donahue as chief executive officer, a person familiar with the matter said on Wednesday.

The company said on Tuesday it was searching for a new CEO after Sanjiv Ahuja resigned from the job, but it did not name any candidates.

LightSquared referred a request for comment to Lew Phelps, a spokesman for Falcone's hedge fund, Harbinger Capital, which has invested billions of dollars in LightSquared. Phelps declined comment and Donahue could not immediately be reached.

Donahue, the former chief executive of Nextel -- now part of Sprint Nextel Corp -- could potentially help LightSquared fight its case in Washington, where the Federal Communications Commission is looking to revoke the company's permission to build a high speed wireless network.

The FCC had to invite LightSquared and any other interested parties to comment on the decision before it could make it final. On Wednesday the FCC said it was extending the deadline for comments to March 16 from March 1 to give LightSquared more time to respond. While this was less than the full month extension LightSquared had asked for, it gives the company more time to argue its case.

During his time at Nextel, one of Donahue's biggest tasks was to work with the FCC on a spectrum rebanding project to overcome concerns about interference between Nextel's network and public safety services.

The person who asked not to be named said Nextel's history was a factor in LightSquared's interest in Donahue, who retired as Sprint's chairman at the end of 2006, just under a year and a half after Sprint's 2005 purchase of Nextel.

Some industry analysts speculated that the company would hire a CEO with experience in restructuring but another source had told Reuters on Tuesday that LightSquared had a shortlist of CEO candidates with experience in both the telecommunications industry and dealing with Washington politics.

On Feb. 14 the FCC said it wanted to stop LightSquared building its high-speed wireless network because tests showed that the network could interfere with Global Positioning Systems on which services such as airline navigation were dependent.

That decision was a massive blow for LightSquared, which had expected to start building its network this year. But the company has indicated it will not back down in its fight to win approval to build a wireless network.

Falcone, who has joined the LightSquared board, said in a statement on Tuesday that the company was "committed to working with the appropriate entities to find a solution to the recent regulatory issues."

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.