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Private-equity firm Centerbridge Partners will buy LightSquared out of a bankruptcy, the Wall Street Journal reported Wednesday afternoon.

LightSquared’s spectrum holdings, at 1.6 GHz, are its chief asset. LightSquared filed for bankruptcy in May 2012, after the FCC blocked the company’s plans to build its wireless broadband network due to fears about GPS interference.

According to C/Net, the tentative deal calls for Centerbridge to pay $3.3 billion for the wireless company. The private equity firm will also assume about $1.7 billion in liabilities, the Journal said.

Charlie Ergen, founder of the satellite TV provider, Dish Network, bid about $2 billion for LightSquared. That bid apparently served as the opening for an auction today at the offices of LightSquared’s bankruptcy lawyers in New York.

According to Tim Farrar, Ergen may have hoped to use the “H-block” (AWS-4) spectrum for downlink and the Lightsquare L-band uplink for backhaul.

With Ergen in the running to acquire the “H block” (after T-Mobile and Sprint dropped out), perhaps Sprint will sell them their remaining “G-Block”, currently used for Sprint’s FD-LTE.

That would then give Ergan 20 MHz in the PCS band and 40 MHz in the adjoining MSS band. Ergan’s MSS band (AWS-4) was acquired from bankrupt satellite phone providers ICO and Terrestar.

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