"If LightSquared does indeed declare bankruptcy, our concern is that the Federal government will be unable to recoup the taxpayer dollars it has expended funding testing on LightSquared's network," Grassley and Turner wrote.

Meanwhile, two other senators reportedly are urging Genachowski to seek alternative spectrum where LightSquared could deploy its network safely. Sen. John Kerry, Democrat of Massachusetts, and Sen. Lindsey Graham, Republican of South Carolina, wrote to Genachowski to ask him to work with industry and other agencies to find other frequencies for the carrier to use, according to on the blog The Hill. It said their letter was dated March 29.

LightSquared's planned wholesale mobile data service would boost wireless competition and serve the public interest, Kerry and Graham said, according to the report.

The carrier itself the government assign it other frequencies farther from the GPS band. However, a spectrum swap probably would take a long time and involve a complex new decision-making process by the FCC, according to industry observers.

The IDG News Service