Sprint - Nextel 2015 Annual Report Download - page 7

Table of Contents
Some competitors are targeting the high-end data market and are offering deeply discounted rates in exchange for high-volume traffic as they attempt to
utilize excess capacity in their networks. In addition, we face increasing competition from other wireless and IP-based service providers. Many carriers, including
cable companies, are competing in the residential and small business markets by offering bundled packages of both voice and data services. Competition in
wireline services is based on price and pricing plans, the types of services offered, customer service and communications quality, reliability and availability. Our
ability to compete successfully will depend on our ability to anticipate and respond to various competitive factors affecting the industry, including new services
that may be introduced, changes in consumer preferences, demographic trends, economic conditions and pricing strategies. See "Item 1A. Risk Factors—
Competition, industry consolidation, and technological changes in the market for wireless services could negatively affect our operations, resulting in adverse
effects on our revenues, cash flows, growth, and profitability."
Legislative and Regulatory Developments
Overview
Communications services are subject to regulation at the federal level by the Federal Communications Commission (FCC) and in certain states by
public utilities commissions (PUCs). Since the SoftBank Merger, we have been subject to regulatory conditions imposed by the Committee on Foreign Investment
in the United States (CFIUS) pursuant to a National Security Agreement (NSA) among SoftBank, Sprint, the Department of Justice, the Department of Homeland
Security and the Department of Defense (the latter three collectively, the USG Parties). Other federal agencies, such as the Federal Trade Commission and
Consumer Financial Protection Bureau, have also asserted jurisdiction over our business.
The following is a summary of the regulatory environment in which we operate and does not describe all present and proposed federal, state and local
legislation and regulations affecting the communications industry. Some legislation and regulations are the subject of judicial proceedings, legislative hearings and
administrative proceedings that could change the way our industry operates. We cannot predict the outcome of any of these matters or their potential impact on our
business. See "Item 1A. Risk Factors—Government regulation could adversely affect our prospects and results of operations; the federal 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."
Regulation and Wireless Operations
The FCC regulates the licensing, construction, operation, acquisition and sale of our wireless operations and wireless spectrum holdings. FCC
requirements impose operating and other restrictions on our wireless operations that increase our costs. The FCC does not currently regulate rates for services
offered by commercial mobile radio service (CMRS) providers, and states are legally preempted from regulating such rates and entry into any market, although
states may regulate other terms and conditions. The Communications Act of 1934 (Communications Act) and FCC rules also require the FCC's prior approval of
the assignment or transfer of control of an FCC license, although the FCC's rules permit spectrum lease arrangements for a range of wireless radio service licenses,
including our licenses, with FCC oversight. Approval from the Federal Trade Commission and the Department of Justice, as well as state or local regulatory
authorities, also may be required if we sell or acquire spectrum interests. The FCC sets rules, regulations and policies to, among other things:
• grant and renew licenses in the 800 MHz, 1.9 GHz and 2.5 GHz bands;
• rule on assignments and transfers of control of FCC licenses, and leases covering our use of FCC licenses held by other persons and organizations;
• govern the interconnection of our networks with other wireless and wireline carriers;
• establish access and universal service funding provisions;
• impose rules related to unauthorized use of and access to subscriber information;
• impose fines and forfeitures for violations of FCC rules;
• regulate the technical standards governing wireless services; and
• impose other obligations that it determines to be in the public interest.
We hold 800 MHz, 1.9 GHz and 2.5 GHz FCC licenses authorizing the use of radio frequency spectrum to deploy our wireless services.
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