* FCC approves LightSquared waiver for terrestrial service
* Will make LightSquared network available to more phones
* Process set up to address interference problems (Adds comments from LightSquared and NTIA)
By Jasmin Melvin
WASHINGTON, Jan 26 (Reuters) - U.S. regulators cleared the way for satellite broadband start-up LightSquared, owned by billionaire investor Philip Falcone’s Harbinger Capital Partners fund, to lease its airwaves to traditional mobile phones.
LightSquared requested the waiver in November to modify conditions around its current wireless spectrum licenses in order to offer terrestrial wireless broadband services.
The Federal Communications Commission approved the waiver on Wednesday, which drops a requirement that all mobile phones using LightSquared airwaves have to support satellite calls, according to the FCC’s website.
“This is a promising opportunity to promote mobile broadband,” a senior FCC official said, according to an FCC statement. “Having an extra player in the mobile broadband field increases competition and provides consumers with more choices.”
The FCC’s decision will allow the Virginia-based company to lease its airwaves to traditional mobile phones instead of only to pricier satellite phones.
“LightSquared’s network will provide a robust, open-access network that will permit reliable and affordable service to customers across the country in every market segment,” the company said in a statement.
The waiver is also critical for Falcone’s roughly $6.4 billion Harbinger Capital Partners which has largely staked its future on building a wireless network. The fund has invested roughly 40 percent of its assets in LightSquared.
The fund’s flagship performance has sagged in recent months and Falcone has had to lay off some investment staff as a large chunk of the fund’s capital has been locked up in LightSquared. The company had promised to use satellites and an array of land-based cell towers to bring broadband service to every corner of the United States.
The agency last year approved an application from the wireless startup to build a high-speed wireless network that would offer both satellite and land-based service for wholesale clients.
But the National Telecommunications and Information Administration objected earlier in the month to LightSquared’s request to alter the original plan so its airwaves could also support terrestrial-only phones.
NTIA, an agency within the U.S. Commerce Department that manages government use of airwaves, cautioned the FCC that allowing such services could interfere with global satellite systems for navigation, aeronautical emergency communications systems and receivers used by federal agencies.
A fully terrestrial service would require more land-based stations than a combined satellite and terrestrial system and increase the likelihood of communications interference, according to the Jan. 12 letter signed by NTIA Administrator Lawrence Strickling.
The senior FCC official said all interference problems must be addressed before LightSquared can offer commercial service under the waiver.
“What we are doing is setting up a process for LightSquared and the GPS community to work together to resolve the interference issue on an expedited basis,” the official said.
LightSquared said in a statement it would diligently “work with all interested parties in an open and comprehensive process to address those concerns.”
NTIA’s Strickling said on Wednesday he was pleased with the FCC’s measures to resolve interference concerns, and NTIA would continue to consult.
Harbinger Capital Partners has invested billions to launch a national broadband wireless network.
LightSquared aims to rent capacity on its network to service providers looking to sell high-speed wireless services to consumers.
Companies such as T-Mobile USA, a Deutsche Telekom (DTEGn.DE) unit, and MetroPCS Communications PCS.N have said they may be interested in partnering with LightSquared if it gets its network up and running. (Reporting by Jasmin Melvin; Additional reporting by Sinead Carew in New York; Editing by Phil Berlowitz)