More job-killer than job-creator

May 01, 2012

Many Americans think Washington is broken, out of touch and unaccountable. For good reason: When it comes to jobs and economic growth, Washington often just can’t get it right. Consider how the Obama administration has made a mess of important opportunities that would provide more jobs and greater prosperity.

Exhibit A is the Keystone XL pipeline. It would have brought oil from Canada’s tar sands and North Dakota’s prolific Bakken field to Gulf Coast refineries, factories and chemical plants. This would have created tens of thousands of private-sector jobs and reduced U.S. dependence on Middle Eastern oil.

No matter. Extreme environmentalists opposed this vital infrastructure project. Rather than offend them, President Barack Obama blocked the pipeline’s construction.

There’s another company the Obama administration has prevented from spending billions to create jobs and improve America’s infrastructure. The company is LightSquared and its cutting-edge technology allows cellphones to communicate over both a satellite and a ground-based system — providing coverage virtually anywhere in the country.

This national 4G wireless network — using advanced satellite and terrestrial cellular technology — would have been available to other cell companies. LightSquared planned to be a wholesaler, driving down prices for consumers. The new network would have required as much as $14 billion in private capital — and tens of thousands of people to build it.

The Federal Communications Commission — first under chairmen appointed by President George W. Bush and then under a chairman appointed by Obama — gave authorization to proceed. The company invested nearly $4 billion to comply with FCC mandates. Among other actions, LightSquared inked a deal with the regional carrier Cellular South, to significantly reduce monthly bills for customers.

But then, after nearly a decade of regulatory “green lights,” the Obama administration reversed itself and started proceedings to kill LightSquared’s ambitious plan to upgrade the U.S. cellular infrastructure. Why? Because at the eleventh hour, concerns were raised about potential interference with GPS devices — interference that occurs because these devices are listening into the part of the spectrum licensed to LightSquared.

In effect, these GPS devices are poaching.

There are technical fixes to this problem. LightSquared has expressed its readiness to help implement them. But rather than solving this issue in a reasonable way, the Obama administration is now proposing to shut down LightSquared’s operations before the network can even be launched.

This will have consequences. Consumers will lose the chance to get better, cheaper wireless service. Owners of tablets, smartphones and other new devices won’t get faster downloads and greater bandwidth. The country would miss out on a valuable infrastructure improvement based on cutting-edge technology. Thousands of workers in construction, steel, transportation and other industries won’t get work, along with the good paychecks that a privately funded $14 billion project like this generates.

Why? Because the Obama administration, which first endorsed and encouraged LightSquared, has now reversed course and gutted it.

Given that this is the slowest, most anemic recovery from any recession since World War II, you might expect the administration to be eager to encourage companies to invest in creating jobs, making the economy more productive and increasing economic growth.

But based on what it’s done to Keystone XL and now LightSquared, you’d be wrong.

The winner of the presidential election will be the candidate who shows voters he best understands where real job growth and economic expansion come from. Not from massive and intrusive government but from private-sector projects like the Keystone XL pipeline and LightSquared’s plan to upgrade cellular infrastructure.

The economy and jobs are the presidential election’s No. 1 issue. Even Obama knows the penalty he’ll pay if the economy remains weak, unemployment high and job growth sluggish.

Which is why his administration’s proposed decision on LightSquared is so puzzling.


This article originally appeared on on Tuesday, May 1, 2012.

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