Sprint - Nextel 2008 Annual Report Download - page 21

infrastructure equipment and devices, which would impose material costs on us including, among other things,
migrating subscribers off the iDEN network. Further, our ability to complete the spectrum reconfiguration plan in
connection with the FCC’s Report and Order is dependent, in part, on Motorola.
We have entered into agreements with unrelated parties for certain business operations. Any difficulties
experienced in these arrangements could result in additional expense, loss of subscribers and revenue,
interruption of our services or a delay in the roll-out of new technology.
We have entered into agreements with unrelated parties for the day-to-day execution of services,
provisioning and maintenance for our CDMA, iDEN and wireline networks, and for the development and
maintenance of certain software systems necessary for the operation of our business. We also have agreements
with third parties to provide customer service and related support to our wireless subscribers and outsourced
aspects of our wireline network and back office functions to third parties. In addition, we have sublease
agreements with third parties for space on communications towers. As a result, we must rely on third parties to
perform certain of our operations and, in certain circumstances, interface with our subscribers. If these third
parties are unable to perform to our requirements, we would have to pursue alternative strategies to provide these
services and that could result in delays, interruptions, additional expenses and loss of subscribers.
The products and services utilized by us and our suppliers and service providers may infringe on intellectual
property rights owned by others.
Some of our products and services use intellectual property that we own. We also purchase products
from suppliers, including device suppliers, and outsource services to service providers, including billing and
customer care functions, that incorporate or utilize intellectual property. We and some of our suppliers and
service providers have received, and may receive in the future, assertions and claims from third parties that the
products or software utilized by us or our suppliers and service providers infringe on the patents or other
intellectual property rights of these third parties. These claims could require us or an infringing supplier or
service provider to cease certain activities or to cease selling the relevant products and services. These claims and
assertions also could subject us to costly litigation and significant liabilities for damages or royalty payments, or
require us to cease certain activities or to cease selling certain products and services.
Government regulation could adversely affect our prospects and results of operations; the FCC and state
regulatory commissions may adopt new regulations or take other actions that could adversely affect our
business prospects, future growth or results of operations.
The FCC and other federal, state and local, as well as international, governmental authorities have
jurisdiction over our business and could adopt regulations or take other actions that would adversely affect our
business prospects or results of operations.
The licensing, construction, operation, sale and interconnection arrangements of wireless
telecommunications systems are regulated by the FCC and, depending on the jurisdiction, international, state and
local regulatory agencies. In particular, the FCC imposes significant regulation on licensees of wireless spectrum
with respect to how radio spectrum is used by licensees, the nature of the services that licensees may offer and
how the services may be offered, and resolution of issues of interference between spectrum bands.
The FCC grants wireless licenses for terms of generally ten years that are subject to renewal and
revocation. There is no guarantee that our licenses will be renewed. Failure to comply with FCC requirements in
a given license area could result in revocation of the license for that license area.
Depending on their outcome, the FCC’s proceedings regarding regulation of special access rates could
affect the rates paid by our Wireless and Wireline segments for special access services in the future. Similarly,
depending on their outcome, the FCC’s proceedings on the regulatory classification of VoIP services could affect
the intercarrier compensation rates and the level of USF contributions paid by us.
In 2004, the FCC adopted a Report and Order to reconfigure the 800 MHz band that provides for the
exchange of a portion of our 800 MHz FCC spectrum licenses and requires us to fund the cost incurred by public
safety systems and other incumbent licensees to reconfigure. In order to accomplish the reconfiguration, we may
19