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)

Sen. Charles E. Grassley (R-Iowa) said Friday he will lift a block on two Federal Communications Commission nominees who have been caught in a dispute over the agency’s handling of troubled satellite venture LightSquared.

Grassley, who has been investigating the FCC, said the agency appears to have given special treatment to the wireless venture founded by New York financier Philip Falcone.

The senator has complained that the agency “stonewalled” his investigation, but because he has recently gotten access to FCC documents, Grassley said he will lift his hold on Republican Ajit Pai and Democrat Jessica Rosenworcel. Both were nominated by President Obama in November 2011, but Grassley put a hold on their appointments in an attempt to pressure the FCC to hand over internal documents related to its decisions on LightSquared.

The FCC has refused to turn over documents to Grassley but recently agreed to a similar request by the House Energy and Commerce Committee, which has oversight of the agency.

After reviewing those papers, Grassley questioned if the agency acted as a “cheerleader” for LightSquared. At issue is the agency’s controversial decision to grant a crucial waiver in early 2011 that would turn LightSquared into a national wireless network. Tests later showed that devices on the network would potentially block out military Global Positioning System signals.

“The documents show that rather than being an objective arbiter, the commission appeared to be enthusiastic about the LightSquared project and wanted to see it materialize,” Grassley said.

The FCC has defended its decision to grant the waiver, saying it would never allow the company to turn on its network until interference issues were resolved. But critics said the agency should have done a better job of vetting the system instead of approving what looked like a “fast-track” process for a private firm.

“We are pleased this roadblock to the confirmation of two outstanding nominees appears to have been removed,” said FCC spokeswoman Tammy Sun.

She and LightSquared declined to comment on Grassley’s allegation of favoritism.

Grassley said he will soon review more documents shared by the House committee.

He did not disclose details of papers he has reviewed so far but said that, “since there is now a process in place to obtain all of the relevant documents from the FCC, I intend to lift my hold on the two FCC nominees. But my inquiry is not over.”

The FCC last March decided to put the LightSquared project on hold after White House tests showed technical interference that would harm public safety and military operations.

LightSquared is now in financial distress, with Falcone warning recently of the dangers of doing business in Washington. He said he would consider declaring the firm bankrupt to buy more time with creditors.