Wireless venture LightSquared files for bankruptcy

LightSquared's end is near.

The company filed for bankruptcy today, according to Bloomberg, marking an unglamorous end to its attempt to create an upstart provider of super-fast wireless service.

LightSquared was designed as a neutral wholesale provider of 4G LTE service, injecting additional competition into the industry and giving companies an alternative partner to work with. Despite its network in constant jeopardy, it had lined up an impressive list of partners willing to ride on its network.

LightSquared, in a statement, said the company plans to continue its normal operation through the process, and still plans to build its 4G LTE network.

"The filing was necessary to preserve the value of our business and to ensure continued operations," said Marc Montagner, interim co-chief operating officer and chief financial officer of LightSquared. "The voluntary Chapter 11 filing is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network."

Ultimately, LightSquared couldn't overcome the concerns that its planned wireless network would interfere with critical global-positioning-system equipment, despite the numerous steps the company had taken to assuage the GPS industry. When the Federal Communications Commission suspended its waiver to use the spectrum for a terrestrial network, rather than a satellite service, the company was largely written off for dead.

The dominoes began to fall with increasing frequency after that. LightSquared CEO Sanjiv Ahuja, who was brought in to give the business a measure of credibility, stepped down weeks after the FCC decision. Last month, Philip Falcone, whose Harbinger Capital runs the venture, stepped aside in an effort to help it avoid defaulting on debt.

But with no business prospects or hope for revenue, bankruptcy for LightSquared was inevitable.

LightSquared listed debt and assets of more than $1 billion each in a Chapter 11 filing with the U.S. Bankruptcy Court in Manhattan, Bloomberg reported.

When LightSquared emerged, it had a unique wholesale business that threatened to shake things up in the industry. The company signed up 30 partners, including Best Buy. It also signed a massive network- and spectrum-sharing deal with Sprint Nextel.

But as the interference concerns mounted, and the tests came up negative, LightSquared was backed into a corner. The company also lost the battle on the political front, facing a strong lobbying effort from the GPS industry.

Clearwire had also emerged as another credible wholesale partner, particularly after shoring up its financial issues and laid a plan to move to 4G LTE.

LightSquared could see a potential acquirer in Dish Network. The New York Post reported that the satellite-TV company bought $350 million in LightSquared's debt. It wouldn't be the first time Dish and founder Charlie Ergen scooped up assets at a bargain basement price -- he bought DBSD and Terrestar, companies with access to spectrum, while they were both in bankruptcy.

Updated at 1:02 p.m. PT: to include a statement from LightSquared.