When Congress acted last month to free much-needed spectrum for mobile broadband, they did so to keep consumer phone bills low and improve broadband service. In the very same week, however, the Federal Communications Commission (FCC) took steps to shut the doors of a brand new start-up wireless company whose existence would provide similar benefits.

LightSquared was granted permission under the Bush administration to launch an innovative new wireless network combining satellites and cell towers. With initial approval, the company began its $14 billion build-out of the network years ago. Then, after billions of dollars already spent, compliance with numerous FCC conditions and regulations, and years of planning, the Obama administration's FCC announced it plans to vacate the decision it made seven years ago, effectively shutting down all of LightSquared’s operations before the network could even be launched.

This debacle is the direct result of lobbying by the GPS industry and various government agencies, which complained to a cowering FCC that the new wireless network would interfere with their devices. There is natural interference between wireless frequencies, a gray area where one person’s property ends and another’s begins. However, in this instance the GPS devices are the ones causing interference by looking directly into LightSquared’s signal.

Mitigating these interference issues and coordinating the licenses to use our nation’s airwaves is one of the primary missions of the FCC. Yet, they have not only failed to uphold this responsibility, but have taken proactive steps to eliminate workable solutions.

For example, an FCC working group found that using spectrum situated farther away from GPS frequencies would solve virtually all interference issues. But the idea was dismissed.

It is also still possible for LightSquared to operate a network of cell towers, forgoing the satellite component. The network would operate at lower power levels so that GPS devices wouldn’t pick up the signal. Yet, the FCC’s order is directly aimed at revoking their ability to launch a ground network. The FCC could also help the company acquire other spectrum that does not have such interference issues.

Instead, the FCC is doing more to help its friends and kowtow to other federal agencies than do its job. It makes one wonder why we don’t phase out the FCC’s top-down system of bureaucrats doling out spectrum licenses and replace it with a free-market approach built upon real property rights.

Critics of LightSquared claim this is a case of politically motivated crony capitalism; that the White House pulled strings to help the company out. But this is the opposite of what is happening. The White House is trying to kill LightSquared like they did the Keystone Pipeline. They’re not artificially propping it up like Solyndra.

This is a case of anti-free market regulatory capture, where GPS companies and the federal agencies they do business with coordinated to stop LightSquared, as e-mails between Defense Department officials recently revealed. The GPS industry even teamed up with bureaucrats in the Pentagon and other departments to leak a preliminary report on interference issues solely to undermine LightSquared.

Government should not pick winners and losers in the market. Yet, in this instance government chose its long-standing, entrenched friends and business partners above a free-market and property rights.

If the FCC backtracks on giving LightSquared the green light, file this alongside the Keystone Pipeline. The Commission should be allowing LightSquared to try all possible options, including launching a ground network or finding new spectrum. Instead, their actions have already forced the company to lay off half its employees.

LightSquared is yet another example of the Obama administration using the regulatory process to halt private investment from creating tens of thousands of new jobs in a sputtering economy.

Grover Norquist is the president of Americans for Tax Reform. Kelly William Cobb is the executive director of its affiliate Digital Liberty.