Garmin 2010 Annual Report Download - page 41

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31
to have lives of 7.5 years and are subject to damage by the hostile space environment in which they operate.
However, of the current deployment of satellites in place, some have been operating for more than 12 years.
If a significant number of satellites were to become inoperable, unavailable or are not replaced, it would
impair the current utility of our Global Positioning System products and would have a material negative effect on
our business. In addition, there can be no assurance that the U.S. government will remain committed to the
operation and maintenance of Global Positioning System satellites over a long period, or that the policies of the
U.S. government that provide for the use of the Global Positioning System without charge and without accuracy
degradation will remain unchanged. Because of the increasing commercial applications of the Global Positioning
System, other U.S. government agencies may become involved in the administration or the regulation of the use of
Global Positioning System signals. However, in a presidential policy statement issued in December 2004, the Bush
administration indicated that the U.S. is committed to supporting and improving the Global Positioning System and
will continue providing it free from direct user fees.
Some of our products also use signals from systems that augment GPS, such as the Wide Area
Augmentation System (WAAS). WAAS is operated by the FAA. Any curtailment of the operating capability of WAAS
could result in decreased user capability for many of our aviation products, thereby impacting our markets.
Any of the foregoing factors could affect the willingness of buyers of our products to select Global
Positioning System-based products instead of products based on competing technologies.
Any reallocation or repurposing of radio frequency spectrum could cause harmful interference with the
reception of Global Positioning System signals. This interference could harm our business.
Our Global Positioning System technology is dependent on the use of the Standard Positioning Service
(SPS) provided by the U.S. Governments Gloal Positioig Sste satellites. The Gloal Positioig Sste
operates in radio frequency bands that are globally allocated for radio navigation satellite services. International
allocations of radio frequency are made by the International Telecommunications Union (ITU), a specialized
technical agency of the United Nations. These allocations are further governed by radio regulations that have
treaty status and which may be subject to modification every two to three years by the World Radio
Communication Conference. Each country also has regulatory authority on how each band is used. In the United
States, the Federal Communications Commission (FCC) and the National Telecommunications and Information
Administration share responsibility for radio frequency allocations and spectrum usage regulations.
Any ITU or national reallocation of radio frequency spectrum, including frequency band segmentation or
sharing of spectrum, or other modifications of the permitted uses of relevant frequency bands, may materially and
adversely affect the utility and reliability of our products and have significant negative impacts on our business and
our customers. For example, the FCC is currently considering a proposal by a private party, LightSquared, to
repurpose spectrum adjacent to the GPS bands for terrestrial broadband wireless operations in metropolitan areas
throughout the United States. If the FCC ee to peit ipleetatio of LightSuaeds poposal as is,
terrestrial broadband wireless operations would create harmful interference to GPS receivers within range of such
operations.
Our business is subject to disruptions and uncertainties caused by war or terrorism.
Acts of war or acts of terrorism, especially any directed at the GPS signals, could have a material adverse
impact on our business, operating results, and financial condition. The threat of terrorism and war and heightened
security and military response to this threat, or any future acts of terrorism, may cause a redeployment of the
satellites used in GPS or interruptions of the system. To the extent that such interruptions have an effect on sales
of our products, this could have a material adverse effect on our business, results of operations, and financial
condition.