Sanjiv Ahuja, the CEO of embattled startup wireless network company Lightsquared, resigned on Tuesday, the company confirmed in a press release. The company will be temporarily headed by Doug Smith, chief network officer, and Marc Montagner, chief financial officer, until a full-time replacement CEO can be found.
Philip A. Falcone, the head of hedge fund Harbinger Capital Partners, who has invested $2 billion in the startup company, said that the company’s plans to build an affordable 4G wireless network using old satellite frequencies would go forward despite the setback.
“As the company takes the next step forward, we continue to be excited about the prospects and look forward to working with new leadership to accomplish our goal of building and operating an innovative, competitive wireless network,” Falcone said.
Still, the news is just the latest in a string of bad news to hit the telecom upstart, beginning with FCC’s decision on February 15 to revoke the conditional permission it initially gave to Lightsquared to build its network, citing government tests indicating that Lightsquared’s proposed national network would interfere with GPS frequencies used by the military and other government agencies. (Lightsquared contends that its network only uses the part of the electromagnetic spectrum allotted to it, and that it is GPS device manufacturers’ responsibilities to create better devices that filter out that part of the spectrum.)
At the time, Ahuja called the FCC’s decision “the height of bureaucratic irresponsibility,” saying it was the government picking “winners and losers” and “undermine[d] the very principles that once made America the best place in the world to do business.”
Ahuja was previously the CEO of Orange, the fifth largest telecom company in the world and a major provider in Europe.
The Daily Caller put the news of Ahuja’s departure in the context of its recent discoveries that both Ahuja and Falcone each made large contributions to Democrats at key points in Lightsquared’s development. In Ahuja’s case, his donation to the Democratic National Committee came on the same day his lawyer sought meetings with the White House.
But by the same token, it’s worth pointing out that Ahuja was reportedly working without a contract since July 2011, according to The Wall Street Journal.
Republicans in Congress have questioned the fact that Lightsquared was given conditional approval in the first place, accusing the company of receiving political favoritism from the Obama Administration.
The White House has pushed back on such claims, telling TPM in September 2011 that “every Administration witness testifying at every hearing on LightSquared has been explicit in identifying the problems for GPS, and the need to resolve interference problems before Lightsquared is allowed to move forward.”
Still, Republicans aren’t satisfied with that answer: On Friday, Reps. Fred Upton (R-MI), Greg Walden (R-OR) and Cliff Stearns sent letters to various federal agencies including the FCC, the Defense Department and the National Telecommunications and Information Administration, which conducted the government’s tests on Lightsquared, requesting all information on the company.
“With the recent tentative decision to limit LightSquared’s license to satellite-based service, there remain many unanswered questions, particularly whether the processes used” by government agencies were “appropriate,” said the GOP-led House Energy and Commerce Committee in a statement announcing the letters.
All three Congressman are leaders in the House Energy and Commerce Committee, and Upton and Stearns have led the charge in the separate Solyndra investigation (where they also accused the White House of showing favoritism).