Harbinger Capital chief Phil Falcone didn't make his billions by throwing good money after bad. As much as he would like to make money on the $3 billion Harbinger has invested in LightSquared, Falcone is ready to cut bait and go home. It's time to stop pouring money and lawyers into a bottomless hole.

Falcone obviously doesn't want to put the innovative mobile network builder into bankruptcy, but he'll go there if there's no other way out. "There are arguments that we would be better off in bankruptcy than not," he told Bloomberg. It may be the best way to control the company as the proposed business model flames out, he clarified to the Wall Street Journal: "Spectrum value does not decrease in bankruptcy."

That may be true, but LightSquared's particular haul of radio licenses comes with some unusual challenges that could limit their commercial value. Originally meant only for low-power satellite signals, LightSquared wanted to repurpose the spectrum to include a network of land-based 4G LTE cell towers. The company signed a long-term supply deal with Sprint Nextel (NYSE: S) as the third-largest mobile operator sought to move away from its codependence with Clearwire (Nasdaq: CLWR). But that plan fell through as the FCC found the proposed network trampling all over neighboring GPS signals.

So Sprint is back to a firm partnership with Clearwire, expanded to include LTE services alongside the existing WiMAX networks. Sprint just launched its first LTE phone with no help from LightSquared. The supposed savior and raison d'etre has moved on and ain't looking back. And I'm not sure if LightSquared can ever find a willing buyer for that spectrum, short of giving it back to the satellite industry. Those pesky laws of nature just refuse to bend to Falcone's will.

So Phil Falcone may take a steel bath on his LightSquared investment, with or without Chapter 11 filings. At least he won't take private investors down with him -- LightSquared never entered the public markets. Thankfully, we regular investors have plenty of other ways to invest in the trillion-dollar mobile computing revolution. To read about one of the most attractive options in this space, just click here to access the Motley Fool's free research report today.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. Check out Anders' holdings and bio or follow him on Twitter and Google+. The Motley Fool has a disclosure policy.
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