Clearwire 2008 Annual Report Download - page 28

us
i
ng
li
cense
df
requenc
i
es
i
nover
l
app
i
ng geograp
hi
c areas, ma
ki
ng qua
li
ty an
d
ava
il
a
bili
ty o
f
t
h
e
i
r serv
i
ce
s
un
p
redictable
.
We are desi
g
nin
g
our network in the United States to operate primaril
y
on spectrum located within the 2496 t
o
2690 MHz band, commonl
y
referred to as the 2.
5
GHz band, which is desi
g
nated for Broadband Radio Service
,
w
hi
c
h
we re
f
er to as BRS
,
an
d
E
d
ucat
i
ona
l
Broa
db
an
d
Serv
i
ce
,
w
hi
c
h
we re
f
er to as EBS. Most BRS an
d
EB
S
licenses are allocated to specific Geo
g
raphic Service Areas, or GSA licenses. Other BRS licenses provide for 49
3
s
eparate Basic Tradin
g
Areas, which we refer to as BTA licenses. Under current FCC rules, the BRS and EBS band
i
n each territory is generally divided into 33 channels consisting of a total of 18
6
MHz of spectrum, with a
n
additional ei
g
ht MHz of
g
uard band spectrum, which further protects a
g
ainst interference from other licens
e
holders. Under current FCC rules, we can access BRS spectrum either throu
g
h outri
g
ht ownership of a BRS license
i
ssue
db
yt
h
e FCC or t
h
roug
h
a
l
eas
i
ng arrangement w
i
t
h
a BRS
li
cense
h
o
ld
er. T
h
e FCC ru
l
es
li
m
i
te
li
g
ibili
ty t
o
h
o
ld
EBS
li
censes to accre
di
te
d
e
d
ucat
i
ona
li
nst
i
tut
i
ons an
d
certa
i
n
g
overnmenta
l
,re
ligi
ous an
d
nonpro
fi
t ent
i
t
i
es,
but permit those license holders to lease up to 95% of their capacit
y
for non-educational purposes. Therefore,
although we cannot hold an EBS license, we can access EBS spectrum through a long-term leasing arrangement
with an EBC license holder. EBS leases entered into before Januar
y
10, 2005 ma
y
remain in effect for up to 15
y
ears
an
d
ma
yb
e renewe
d
an
d
ass
ig
ne
di
n accor
d
ance w
i
t
h
t
h
e terms o
f
t
h
ose
l
eases an
d
t
h
e app
li
ca
bl
e FCC ru
l
es an
d
r
e
g
ulations. The initial term of EBS leases entered into after Januar
y
10, 200
5
is required b
y
FCC rules to be
c
oterm
i
nous w
i
t
h
t
h
e term o
f
t
h
e
li
cense. In a
ddi
t
i
on, t
h
ese
l
eases typ
i
ca
ll
yg
i
ve t
h
e
l
ease
h
o
ld
er t
h
er
i
g
h
tt
o
p
art
i
c
i
pate
i
nan
d
mon
i
tor comp
li
ance
by
t
h
e
li
cense
h
o
ld
er w
i
t
h
FCC ru
l
es an
d
re
g
u
l
at
i
ons. EBS
l
eases entere
di
nt
o
after Jul
y
19, 2006 that exceed 1
5y
ears in len
g
th must
g
ive the licensee the ri
g
ht to reassess their needs ever
y
fiv
e
y
ears starting in year 15. Our EBS spectrum leases typically have an initial term equal to the remaining term of th
e
EBS
li
cense, w
i
t
h
an opt
i
on to renew t
h
e
l
ease
f
or up to t
h
ree renewa
l
terms o
f
ten years or
l
ess w
i
t
h
respect to a
fi
na
l
r
enewal term, for a total lease term of up to 30
y
ears. In addition, we
g
enerall
y
have a ri
g
ht of first refusal for a
p
er
i
o
d
o
f
t
i
me a
f
ter our
l
eases exp
i
re or ot
h
erw
i
se term
i
nate to matc
h
anot
h
er party’s o
ff
er to
l
ease t
h
e sam
e
s
pectrum. Our
l
eases are
g
enera
lly
trans
f
era
bl
e.
We
h
ave BRS
li
censes an
dl
eases, as we
ll
as EBS
l
eases,
i
na
l
arge num
b
er o
f
mar
k
ets across t
h
eUn
i
te
d
States.
W
e believe that our si
g
nificant spectrum holdin
g
s, both in terms of spectrum depth and breadth, in the 2.
5
GHz band
will be optimal for deliverin
g
our planned wireless broadband services. As of December 31, 2008, we believe tha
t
we are t
h
e
l
argest
h
o
ld
er o
fli
cense
d
w
i
re
l
ess spectrum
i
nt
h
eUn
i
te
d
States. As o
f
Decem
b
er 31, 2008, we owne
d
o
r
leased, or had entered into a
g
reements to acquire or lease, approximatel
y
43 billion MHz-POPs of spectrum in the
U
n
i
te
d
States. O
f
our approx
i
mate
l
y43
billi
on MHz-POPs o
f
spectrum
i
nt
h
eUn
i
te
d
States, we est
i
mate t
h
at w
e
own approx
i
mate
l
y 41% o
f
t
h
ose MHz-POPs w
i
t
h
t
h
e rema
i
n
d
er
b
e
i
ng
l
ease
df
rom t
hi
r
d
part
i
es, genera
ll
yun
d
e
r
l
ease terms t
h
at exten
d
up to 30
y
ears
.
Our pen
di
n
g
spectrum acqu
i
s
i
t
i
on an
dl
ease a
g
reements are su
bj
ect to var
i
ous c
l
os
i
n
g
con
di
t
i
ons, some o
f
which are outside of our control and, as a result, we ma
y
not acquire or lease all of the spectrum that is sub
j
ect t
o
th
ese agreements. Near
l
ya
ll
o
f
suc
h
c
l
os
i
ng con
di
t
i
ons re
l
ate e
i
t
h
er to
li
censee or FCC consents, w
hi
c
h
we expec
t
are
lik
e
l
yto
b
e grante
d
.A
li
m
i
te
d
num
b
er o
f
our pen
di
ng acqu
i
s
i
t
i
on agreements are su
bj
ect to c
l
os
i
ng con
di
t
i
on
s
i
nvolvin
g
the resolution of bankruptc
y
or similar proceedin
g
s. As of December 31, 2008, we had minimu
m
p
urchase commitments of approximately
$
47.8 million to acquire new spectrum.
We en
g
ineer our networks to optimize both the service that we offer and the number of subscribers to whom w
e
c
an o
ff
er serv
i
ce. Upon t
h
ec
h
ange to mo
bil
eW
i
MAX, we genera
ll
y
d
o not expect to
l
aunc
h
our serv
i
ces
i
n a mar
k
et
unless we control, throu
g
h license or lease, a minimum of three conti
g
uous blocks of 10 MHz of spectru
m
bandwidth. However, we expect the spectral efficienc
y
of technolo
g
ies we deplo
y
to continue to evolve, and as a
r
esu
l
t, we may
d
ec
id
eto
d
ep
l
oy our serv
i
ces
i
n some mar
k
ets w
i
t
hl
ess spectrum. A
l
ternat
i
ve
l
y, we may
fi
n
d
t
h
a
t
n
ew technolo
g
ies and subscriber usa
g
e patterns make it necessar
y
or practical for us to have more spectru
m
available in our markets prior to launchin
g
our services in that market.
We hold approximatel
y
1
5
0 MHz of spectrum on avera
g
e in the lar
g
est 100 markets in the United States. Ou
r
d
eep spectrum pos
i
t
i
on
i
n most o
f
our mar
k
ets
i
s expecte
d
to ena
bl
eustoo
ff
er
f
aster
d
own
l
oa
d
spee
d
san
d
prem
i
um
s
erv
i
ces an
dd
ata-
i
ntens
i
ve mu
l
t
i
me
di
a content, suc
h
as v
id
eocon
f
erenc
i
ng, on
li
ne games, stream
i
ng au
di
o, v
id
e
o
on demand and location-based services.
16