Clearwire 2009 Annual Report Download - page 25

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 designing our network in the United States to operate primarily on spectrum located within the 249
6
t
o
2690 MHz band, commonl
y
referred to as the 2.
5
GHz band, which is desi
g
nated for Broadband Radio Service
,
which we refer to as BRS, and Educational Broadband Service, which we refer to as EBS. Most BRS and EB
S
li
censes are a
ll
ocate
d
to spec
ifi
c Geograp
hi
c Serv
i
ce Areas. Ot
h
er BRS
li
censes prov
id
e
f
or 493 separate Bas
ic
Tradin
g
Areas, which we refer to as BTA. Under current FCC rules, the BRS and EBS band in each territor
y
is
g
enerall
y
divided into 33 channels consistin
g
of a total of 186 MHz of spectrum, with an additional ei
g
ht MHz o
f
guar
db
an
d
spectrum, w
hi
c
hf
urt
h
er protects aga
i
nst
i
nter
f
erence
f
rom ot
h
er
li
cense
h
o
ld
ers. Un
d
er current FCC
r
ules, we can access BRS spectrum either throu
g
h outri
g
ht ownership of a BRS license issued b
y
the FCC or throu
gh
a leasin
g
arran
g
ement with a BRS license holder. The FCC rules
g
enerall
y
limit eli
g
ibilit
y
to hold EBS licenses t
o
accre
di
te
d
e
d
ucat
i
ona
li
nst
i
tut
i
ons an
d
certa
i
n governmenta
l
,re
li
g
i
ous an
d
nonpro
fi
t ent
i
t
i
es,
b
ut perm
i
tt
h
os
e
license holders to lease up to 95% of their capacit
y
for non-educational purposes. Therefore, apart from a few EBS
li
censes we acqu
i
re
d
un
d
er an o
ld
EBS ru
l
e, we access EBS spectrum t
h
rou
gh l
on
g
-term
l
eas
i
n
g
arran
g
ements w
i
t
h
EBS license holders. EBS leases entered into before January 10, 200
5
may remain in effect for up to 1
5
years an
d
m
a
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, 2005 is required b
y
FCC rules to be
c
oterminous with the term of the license. In addition, these leases t
y
picall
yg
ive the leaseholder the ri
g
ht t
o
p
art
i
c
i
pate
i
nan
d
mon
i
tor comp
li
ance
b
yt
h
e
li
cense
h
o
ld
er w
i
t
h
FCC ru
l
es an
d
regu
l
at
i
ons. EBS
l
eases entere
di
nt
o
after Jul
y
19, 2006 that exceed 15
y
ears in len
g
th must
g
ive the licensee the ri
g
ht to reassess their educational use
r
equirements ever
y
five
y
ears startin
g
in
y
ear 1
5
. Our EBS spectrum leases t
y
picall
y
have an initial term equal to th
e
r
ema
i
n
i
ng term o
f
t
h
e EBS
li
cense, w
i
t
h
an opt
i
on to renew t
h
e
l
ease
f
or a
ddi
t
i
ona
l
terms,
f
or a tota
ll
ease term o
f
u
p
t
o30
y
ears. In addition, we
g
enerall
y
have a ri
g
ht of first refusal for a period of time after our leases expire o
r
otherwise terminate to match another part
y
’s offer to lease the same spectrum. Our leases are
g
enerall
y
transferable.
We
h
ave BRS
li
censes an
dl
eases, as we
ll
as EBS
l
eases,
i
na
l
ar
g
e 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 4G mobile broadband services. As of December 31, 2009, we believe we were the
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, 2009, we owne
d
or
l
ease
d
,o
r
had entered into a
g
reements to acquire or lease, over 44 billion MHz-POPs of spectrum in the United States. Of this
over 44 billion MHz-POPs of spectrum in the United States, we estimate that we own approximatel
y
41% of those
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
er
l
ease terms t
h
at exten
d
up t
o
3
0
y
ears. As of December 31, 2009, the wei
g
hted avera
g
e remainin
g
life of these spectrum leases based on the valu
e
of all payments that we are amortizing over the life of the spectrum leases was approximately 26 years, including
r
ene
w
a
l
terms.
Our pendin
g
spectrum acquisition and lease a
g
reements are sub
j
ect to various closin
g
conditions, some of
w
hi
c
h
are outs
id
eo
f
our contro
l
an
d
, as a resu
l
t, we may not acqu
i
re or
l
ease a
ll
o
f
t
h
e spectrum t
h
at
i
ssu
bj
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 likel
y
to be
g
ranted. A limited number of our pendin
g
acquisition a
g
reements are sub
j
ect to closin
g
condition
s
i
nvo
l
v
i
ng t
h
e reso
l
ut
i
on o
fb
an
k
ruptcy or s
i
m
il
ar procee
di
ngs. As o
f
Decem
b
er 31, 2009, we
h
a
d
m
i
n
i
mu
m
p
urchase commitments of approximatel
y
$30.0 million to acquire new spectrum.
We engineer 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 4G mo
bil
e
b
roa
db
an
d
tec
h
no
l
ogy, we genera
ll
y
d
o not expect to
l
aunc
h
ou
r
s
ervices in a market unless we control, throu
g
h license or lease, a minimum of three conti
g
uous blocks of 10 MHz of
s
pectrum bandwidth. However, we expect the spectral efficienc
y
of technolo
g
ies we deplo
y
to continue to evolve
,
an
d
as a resu
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 ma
y
find that new technolo
g
ies and subscriber usa
g
e patterns make it necessar
y
or practical for us to have more spectru
m
ava
il
a
bl
e
i
n our mar
k
ets pr
i
or to
l
aunc
hi
ng our serv
i
ces
i
nt
h
at mar
k
et.
We
h
o
ld
approx
i
mate
ly
120 MHz o
f
spectrum on avera
g
e across our nat
i
ona
l
spectrum
f
ootpr
i
nt. Our
d
eep
sp
ectrum
p
osition in most of our markets is ex
p
ected to enable us to offer faster download s
p
eeds and
p
remium
15