Clearwire 2008 Annual Report Download - page 34

Th
e FCC
i
s cons
id
er
i
ng a
ddi
t
i
ona
l
regu
l
at
i
ons,
i
nc
l
u
di
ng w
h
at
i
ntercarr
i
er compensat
i
on reg
i
me s
h
ou
ld
app
l
y
t
o interconnected VoIP traffic over the PSTN. Accordin
g
l
y
, our costs to provide VoIP service ma
y
increase, whic
h
w
ill impact our pricing decisions in relation to our competitors and our profit margins, if any
.
O
nAu
g
ust 5, 2005, the FCC adopted an Order findin
g
that both facilities-based broadband Internet access
p
roviders and interconnected VoIP providers are sub
j
ect to CALEA, which requires service providers covered b
y
th
at statute to
b
u
ild
certa
i
n
l
aw en
f
orcement surve
ill
ance ass
i
stance capa
bili
t
i
es
i
nto t
h
e
i
r commun
i
cat
i
ons
n
etworks and to maintain CALEA-related s
y
stem securit
y
policies and procedures. On Ma
y
3, 200
6
, the FC
C
adopted an additional Order addressing the CALEA compliance obligations of these providers. In that order, th
e
F
CC: (1) a
ffi
rme
d
t
h
e May 14, 2007 ass
i
stance-capa
bili
ty comp
li
ance
d
ea
dli
ne; (2)
i
n
di
cate
d
comp
li
ance stan
d
ar
d
s
are to
b
e
d
eve
l
ope
dby
t
h
e
i
n
d
ustr
y
w
i
t
hi
nt
h
ete
l
ecommun
i
cat
i
ons stan
d
ar
d
s sett
i
n
gb
o
di
es wor
ki
n
g
to
g
et
h
er w
i
t
h
law enforcement; (3) permitted the use of certain third parties to satisfy CALEA compliance obligations;
(
4) restricted the availability of compliance extensions; (
5
) concluded that facilities-based broadband Interne
t
access prov
id
ers an
di
nterconnecte
d
VoIP prov
id
ers are respons
ibl
e
f
or an
y
CALEA
d
eve
l
opment an
di
mp
l
emen-
t
ation costs; (6) declared that the FCC ma
y
pursue enforcement action, in addition to remedies available throu
g
hth
e
c
ourts, against any non-compliant provider; and (7) adopted interim progress report filing requirements. The FC
C
r
equ
i
re
df
ac
ili
t
i
es-
b
ase
db
roa
db
an
d
Internet access prov
id
ers an
di
nterconnecte
d
VoIP prov
id
ers to comp
ly
w
i
t
h
CALEA’s assistance capabilit
y
requirements b
y
Ma
y
14, 2007. We believe we have taken the necessar
y
actions t
o
b
e in com
p
liance with these re
q
uirements.
R
egu
l
atory po
li
c
i
es app
li
ca
bl
eto
b
roa
db
an
d
Internet access, VoIP an
d
ot
h
er IP-serv
i
ces are cont
i
nu
i
ng t
o
develop, and it is possible that our broadband Internet access and VoIP services could be sub
j
ect to additiona
l
r
egu
l
at
i
ons
i
nt
h
e
f
uture. T
h
e extent o
f
t
h
e regu
l
at
i
ons t
h
at w
ill
u
l
t
i
mate
l
y
b
e app
li
ca
bl
etot
h
ese serv
i
ces an
d
t
h
e
i
mpact o
f
suc
h
regu
l
at
i
ons on t
h
ea
bili
ty o
f
prov
id
ers to compete are current
l
yun
k
nown.
S
p
ectrum Regu
l
atio
n
T
he FCC routinel
y
reviews its spectrum policies and ma
y
chan
g
e its position on spectrum allocations fro
m
ti
me to t
i
me. On Ju
l
y 29, 2004, t
h
e FCC
i
ssue
d
ru
l
es rev
i
s
i
ng t
h
e
b
an
d
p
l
an
f
or BRS an
d
EBS an
d
esta
bli
s
hi
ng more
flexible technical and service rules to facilitate wireless broadband o
p
erations in the 249
6
to 2
6
90 MHz band. Th
e
F
CC a
d
o
p
te
d
new ru
l
es t
h
at (1) ex
p
an
d
t
h
e
p
erm
i
tte
d
uses o
f
EBS an
d
BRS s
p
ectrum so as to
f
ac
ili
tate t
h
e
p
rov
i
s
i
on
of high-speed data and voice services accessible to mobile and fixed users on channels that previously were use
d
p
r
i
mar
ily f
or one-wa
y
v
id
eo
d
e
li
ver
y
to
fi
xe
dl
ocat
i
ons; an
d
(2) c
h
an
g
e some o
f
t
h
e
f
requenc
i
es on w
hi
c
h
BRS an
d
E
BS operat
i
ons are aut
h
or
i
ze
d
to ena
bl
e more e
ffi
c
i
ent operat
i
ons. T
h
ese new ru
l
es stream
li
ne
dli
cens
i
n
g
an
d
r
e
g
ulator
y
burdens associated with the prior service rules and created a “PCS-like” framework for
g
eo
g
raphi
c
li
cens
i
ng an
di
nter
f
erence protect
i
on. Un
d
er t
h
enewru
l
es, ex
i
st
i
ng
h
o
ld
ers o
f
BRS an
d
EBS
li
censes an
dl
eases
g
enera
lly h
ave exc
l
us
i
ve r
igh
ts over use o
f
t
h
e
i
r ass
ig
ne
df
requenc
i
es to prov
id
e commerc
i
a
l
w
i
re
l
ess
b
roa
db
an
d
s
ervices to residences, businesses, educational and
g
overnmental entities within their
g
eo
g
raphic markets. Thes
e
r
u
l
es a
l
so requ
i
re BRS
li
censees,
i
nc
l
u
di
ng us, to
b
ear t
h
e
i
r own expenses
i
n trans
i
t
i
on
i
ng to t
h
enew
b
an
d
p
l
an an
d,
if
t
h
ey are see
ki
ng to
i
n
i
t
i
ate a trans
i
t
i
on, to pay t
h
e costs o
f
trans
i
t
i
on
i
ng EBS
li
censees to t
h
enew
b
an
d
p
l
an. T
he
t
ransition rules also provide a mechanism for reimbursement of transaction costs b
y
other operators in the market.
Addi
t
i
ona
ll
y, t
h
e FCC expan
d
e
d
t
h
e scope o
fi
ts spectrum
l
eas
i
ng ru
l
es an
d
po
li
c
i
es to a
ll
ow BRS an
d
EBS
li
censees
t
o enter
i
nto
fl
ex
ibl
e,
l
ong-term spectrum
l
eases
.
O
n April 21, 2006, the FCC issued an Order adopting comprehensive rules for relocating incumbent BRS
operations in the 21
5
0 to 2162 MHz band. These rules will further facilitate the transition to the new 2.
5
GHz ban
d
pl
an. T
hi
sOr
d
er
i
s current
ly
su
bj
ect to Pet
i
t
i
ons
f
or Recons
id
erat
i
on an
dj
u
di
c
i
a
l
appea
l.
O
n April 27, 2006, the FCC released a further Order revising and clarifying its BRS/EBS rules. Significantly,
th
e FCC
g
enera
lly
rea
ffi
rme
d
t
h
e
fl
ex
ibl
e tec
h
n
i
ca
l
an
d
operat
i
ona
l
ru
l
es on w
hi
c
h
our s
y
stems are
d
es
ig
ne
d
an
d
operat
i
n
g
.T
h
e FCC c
l
ar
ifi
e
d
t
h
e process o
f
trans
i
t
i
on
i
n
gf
rom t
h
eo
ld
spectrum p
l
an to t
h
e new spectrum p
l
an,
b
ut
r
educed the transition area from lar
g
e “ma
j
or economic areas,” to smaller, more mana
g
eable “basic tradin
g
areas.
”
P
roponents see
ki
ng to
i
n
i
t
i
ate a trans
i
t
i
on to t
h
enew
b
an
d
p
l
an w
ill b
eg
i
ven a 30-mont
h
t
i
me
f
rame w
i
t
hi
nw
hi
c
h
t
o
n
ot
if
yt
h
e FCC o
f
t
h
e
i
r
i
ntent to
i
n
i
t
i
ate a trans
i
t
i
on,
f
o
ll
owe
db
yat
h
ree-mont
h
p
l
ann
i
ng per
i
o
d
an
d
an 18-mont
h
t
ransition com
p
letion
p
eriod. In markets where no
p
ro
p
onent initiates a transition, licensees will be
p
ermitted t
o
22