The Washington Post

Democrats call for investigation into bankrupt Open Range federal loans

Updated to correct reference at bottom of story. Previous version incorrectly stated that Open Range failed to launch satellites. The company Globalstar failed to fulfill promises of expanding satellite coverage.

House Democrats on Wednesday called for Congress to expand its investigation into federal loan programs to include a Bush-era loan to the bankrupt broadband Internet firm Open Range.

Open Range went bankrupt earlier this month after receiving the federal government’s biggest broadband loan totaling $267 million. Its collapse has put in jeopardy $74 million in money doled out to the firm.

Reps. Henry Waxman (D-Calif.), Diana DeGette (D-Colo.) and Edward Markey (D-Mass.) asked the leader of the House Energy and Commerce Committee to include Greenville, Colo.-based Open Range in its current investigation of federal loan guarantees granted to the bankrupt solar panel firm Solyndra.

Open Range did not return several requests for an interview.

“Your reaction to the Open Range bankruptcy could not be more different than your reaction to the Solyndra bankruptcy,” the lawmakers said in their letter to Energy and Commerce Committee chairman Fred Upton (R-Mich.).

“Like Solyndra, however, the Open Range loan puts millions of taxpayer dollars at risk.”

Waxman is ranking member of the Energy and Commerce Committee. DeGette is ranking member of the Oversight and Investigations Subcommittee.

They said House Republicans have accused the Obama administration for “picking winners and losers” with support for certain Democratically connected solar, wind and other renewable energy projects. But GOP House members overlooked a Bush-era loan recipient with a similar troubling story, they said.

Open Range, was a loan approved by the USDA during the Bush Administration. The company said in a bankrupt filing earlier this month that its troubles stemmed partly from a decision at the Federal Communications Commission in September 2010 to discontinue a special license for partner Globalstar. Once the FCC took away the waiver, Open Range said the USDA slashed its original loan and investors fled.

The FCC has said in public documents that it was obligated to cease a waiver for Globalstar to use its satellites to provide mobile broadband services that were being leased by Open Range. The FCC said Globalstar failed to fulfill promises to launch more satellites within a promised timeframe and the agency had to revoke the waiver.

Open Range’s collapse came at about the same time as that of Solyndra, a venture backed by more than $500 million in loan guarantees from the Energy Department.

Cecilia Kang is a senior technology correspondent for The Washington Post.



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