Correction: A previous version of this article said that Harbinger Capital may soon file for bankruptcy; it is LightSquared that might soon file. It also attributed a letter written to the FCC to outside investors; it was LightSquared investors who sent the letter. This version has been corrected.

WASHINGTON,DC-MARCH 15: LightSquared booth at Satellite 2011 Convention at Washington Convention Center in Washington,DC on March 15, 2011. (Jeffrey MacMillan/FOR WASHINGTON POST)

Wall Street guru Philip Falcone placed a $14 billion bet on what he thought was a sure thing. Two years ago, his company had the blessing of the Federal Communications Commission to use satellites to bring cellular service to the farthest reaches of the country, a high priority for President Obama.

Today, the FCC has put the project on ice, all but killing it. And Falcone, acknowledging for the first time that his business is near bankruptcy, on Thursday pointed an angry finger at Washington.

In a scathing critique of inside-the-Beltway politics, Falcone in an interview accused the FCC of bowing to special interests that could have been hurt by the innovation, robbing consumers of a cheaper alternative to AT&T and Verizon Wireless.

Falcone and other business groups see the fall of Reston-based LightSquared as a cautionary tale of what can happen when a business bets on Washington.

“We were ready to put the shovel in the ground, but they pulled the rug out from under us,” Falcone said. Lobbyists, he added, “have a tremendous amount of power, and I was shocked by how regulators responded to that pressure.”

The FCC had been a champion of LightSquared’s groundbreaking technology and last year put the company’s plans on a fast track, analysts of the project have said. The unusual move drew criticism from lawmakers and some business groups.

Preliminary tests showed that LightSquared’s devices interfered with Global Positioning System signals used by the military and airplanes. Industry groups and federal agencies lobbied the FCC and Congress to nix LightSquared’s plans.

“We don’t pick sides,” FCC general counsel Austin Schlick said. “Our decision-making here, as on other issues, will continue to be based on the record and guided by law, engineering and settled policies that seek to remove regulatory barriers to broadband while avoiding harmful interference.”

But Falcone remains adamant that the engineering problems could have been fixed. Ultimately, it was politics, not the technical interference, that disrupted the project’s promise, he said.

“The message to investors and other businesses is that if this couldn’t work, what can?” said Jeffrey Silva, an analyst at the Medley Global Advisors research firm. “When this came out of the box, they had all the right licenses, and there was no good reason to believe it wasn’t on solid ground.”

The LightSquared saga has been a remarkable defeat for Falcone, who made billions of dollars as an investment “vulture” by buying distressed companies and assets at bargain-basement prices. Falcone has been a major donor to Republicans and increasingly to Democrats after Obama took the White House.

He first got into the telecom business in 2010 when he took advantage of a rare opportunity to buy a slice of airwaves. The spectrum was like owning a prime piece of real estate in downtown Manhattan, and it had all the government permits needed to build the next-generation wireless service. The network would beam signals from satellites in space to phones on the ground.

Falcone and his partners founded the company LightSquared, which would control the airwaves. The company was backed by Falcone’s fund Harbinger Capital, which initially put in $4 billion and pledged $10 billion more.

With Obama calling for a nationwide expansion of broadband, the FCC jumped at the opportunity to back the business.

FCC Chairman Julius Gena­chowski, who was a major fundraiser for Obama’s 2008 campaign, called the venture a public service. In January 2011, the FCC’s staff granted a further approval for the project, with conditions, while circumventing the agency’s five-member commission, lawmakers say. At the time, the agency called LightSquared “a new kind of business model that consumers find appealing.”

That’s when the GPS industry, as well as the military and government agencies, began to protest the plans. Air-safety officials said LightSquared’s network could lead to plane crashes. GPS makers and companies such as John Deere, which relies on such equipment, asked agency officials and lawmakers to oppose the project.

Republican lawmakers, led by Sen. Charles E. Grassley (R-Iowa), called for hearings on why the FCC had fast-tracked LightSquared without vetting the technical-interfence issues. He has asked for private e-mails and documents between the agency and the company, a request the FCC has so far denied.

In February, Tammy Sun, a spokesperson for the agency, said that because other agencies “concluded that there is no practical way to mitigate potential interference at this time,” the FCC would not move forward on the project.

Falcone was left holding the bag. He said on Thursday that LightSquared may soon file for bankruptcy.

Falcone said he is committed to saving LightSquared. He is facing pressure from Carl Icahn, who invested in LightSquared bonds, as well as other creditors who have called for LightSquared to go into Chapter 11.

“For the Commission to proceed on its current course would send an ominous signal to future sources of capital considering investments in United States telecommunications infrastructure,” LightSquared investors wrote to the FCC.

Other businesses have closely watched the project’s unraveling.

Leap Wireless wrote to the FCC last month that its proposal to abandon LightSquared would “have an unintended chilling effect” on buying airwaves in the future. The Rural Carrier Association, a trade group, said the FCC decision would “only empower the duopolistic” AT&T and Verizon Wireless.

For all of Falcone’s success on Wall Street, some analysts say Falcone and LightSquared made a misplaced bet on an unproven business and underestimated the task of swaying Washington.

Falcone disagrees.

“This is capital I raised and put into LightSquared based on a license we got and based on rules and regulations,” he said. “I did everything I was supposed to do.”