Q3 2020 Earnings Call
Thanks for holding we appreciate your time in patient. Please stay on the line and well be back in just a moment.
[music].
Now my afternoon, ladies and gentlemen, and welcome to the entire next quarter update conference call. At this time all participants are in place I don't listen only mode and we will open the floor for your questions and comments. After the presentation. It is now my pleasure to doing before with your hosts Natasha Ceccarelli.
The floor is yours.
Good afternoon, everyone and thank you for joining a with me today are Ryan Mcauley, our chairman Morgan Obrien, our CEO, Rob Schwartz, our president and COO and him Gray our CFO before we begin. Please note that any statements. We make during this call that are not based on historical facts constitute forward looking.
And our actual results could differ materially from now they can play.
Information regarding the risk factors that could cause such differences can be found in our public filings, including most recently filed form 10-Q for the quarter ended December 31st 2019.
A copy of our recent can you can be found on our Investor Relations web page with that I'd like to turn the call over to Morgan Obrien.
Thank you Natasha and thank you everybody for joining us this afternoon.
The last time, we had a chance to review with investors our progress on the FCC regulatory front.
We said that all signs were pointing to the fact that a decision was getting close.
No signs continue and we believed that the stops the wireless Bureau, that's virtually completed its analysis of the issues.
That has made recommendations on the proceeding to the chairman.
We do not rule out the possibility that's happened on the issuance of the N. PRM.
At the matter could be handled by circulation.
The process reach commissioner has the opportunity to vote on the item outside of the formal open meeting session.
We share our investors in patients with the process, but the most important thing just to get a ruling that works well.
For our principal objective, which is to meet the needs of the electric utilities and other critical infrastructure enterprises for broadband at 900 maker.
I thought it might be useful to spend a few minutes outlining just how far we've come.
Starting in 2014. This was a quest by a single small player to revamp completely the 30 year status quo at 900 megahertz.
Previous efforts by the FCC to make improvements had been defeated by incumbents and by their trade associations, including E. W way.
The FCC environment than and now what's hostile to speculators, who bought spectrum license under one set of rules and then tried to change the rules to allow flip at the spectrum for profit.
Aligned against change where the electric utilities.
Railroads oil and gas.
Vendors linked to the income, it's like Motorola Harrison Kenwood, and a half dozen or so major trade associations like.
Like Edison electric UTI see <unk>.
On the Association American railroads.
If the FCC were to create a broadband portion of the ban we believed that the minimum useful block size Senate commercial sense would be three by three megahertz.
So that met all other incumbents would have to move into the new to buy to created from the remaining spectrum in the bad.
From the standpoint, if the capital raise or is it turned out raises.
We wouldn't be swimming upstream and an investor environment focused on huge new blocks of spectrum.
Fiveg.
And the consumer versus enterprise volumes back.
Where are we now five years later.
Motorola and they are among the influential parties now on the record supporting and broadband proposal.
Importantly.
Edison Electric Institute by far the most influential trade association for the utilities moved away from its earlier participation in an effort opposing the rulemaking and now is playing a very constructive role protecting it up but also in other efforts to make broadband available for its members.
Suffice to say that even some of the most relentless opponents of change have revised their positions either to embrace the new broadband opportunity.
Where to concede its existence and to try to nibble around the edges particular advantage to themselves.
In Terex is now recognized in major industry events as the new and innovative player that's delivering on private LTV.
While we wait for the FCC to act.
Few new things on the record are particularly encouraging.
On December 520, 19 at the House Subcommittee on Communications and technology hearing.
On accountability and oversight of the FCC.
Chairman Pie was asked the following question.
One promising innovation and wildfire mitigation is the falling line conductor.
Uses low latency private LTE networks to D. power broken line before it hits the ground becomes a fire has it.
Do you have a view on how such technologies can help mitigate well far threats and the need for preemptive electrical shut off.
Well the FCC complete its 900 megahertz proceeding that impacts the ability of utilities to use such technologies.
Chairman pies response.
Was.
I agree that new technologies can help mitigate public safety emergency such as well fires.
Robust next generation broadband networks can encourage the development of such technologies that is why the FCC is pursuing a comprehensive strategy to facilitate America's suncorp superiority in Fiveg technology, which is the Fiveg fast plan.
The plan includes three key components.
Pushing more spectrum into the marketplace updating infrastructure policy and modernizing up David regulations.
Under my leadership, the FCC has proposed to make a segment of the 900 megahertz band available for mobile broadband.
Hi, I'm confident the chairman said, we will be able to move forward and that proceeding in the near future.
Have you ever side hearing the chairman stellar commissioners, whereas the same question about the need for FCC action to assist in the reduction or tragic wildfires in California.
Their answers on the record give us further optimism that the 900 megahertz broadband item enjoys wide support.
And is nearing resolution.
Subordinate only to the effort to achieve finality at the FCC.
Tom on effort on our part is preparing for the clearing have been comments from the proposed broadband spectrum allocation.
[noise], our investors may recall, but there are about 400 and combines two or license and that portion of the band, which the FCC is proposing for broadband and if that number and terex team has already contacted over half.
The spectrum transactions database.
He has been designed.
Constructed.
Tested and is in years, we've hired additional experienced team members to assist in the negotiation to spectrum acquisitions and spectrum re tuning plans.
As we announced previously a strategic agreement with E.W. ways in place.
And it's allowing us to leverage their resources and membership to multiply our efforts to reach out to incumbents ended the dealers who represent them.
We believe this relationship will speed up the rebuilding process and allows us to deliver cleared spectrum for broadband use efficiently.
Without causing undue disruption to the incumbents, who decided to continue narrowband operations of course all of our efforts are keyed first to the markets are critical infrastructure customers have already begun discussions with us.
And Terex and its proposed business plan do not exist in a vacuum.
From among dozens of relevant proceedings that are on our radar screen as the following.
Threeg GPP is the standards body that establishes and maintains the LT specification.
In December it adopted plans to accommodate a range of channel sizes, including specifically three megahertz channels.
To lay the groundwork for Fiveg.
We're monitoring the three GPP work closely to help ensure the smooth evolution of old of LT Fourg systems to Fiveg.
Over the next few years will be carefully monitoring new three GPP releases for enhancements.
Likely to be useful for critical infrastructure, such as communications ultra reliability in ultra low latency.
Massive new I O T or internet of things feature set and additional networks slicing capabilities.
[noise] the investors who are following the record in the proceeding will note that much of the opposition to our proposal for 900 Megabits broadband has given way to request for relatively minor changes in the way that the rebranding will be handled.
An example of the ex parte filings by LCR Ray and Nextera that can test the number of complex system markets that should be exempt from any mandatory be tuning process.
Also on the record our continued efforts to reap the rewards and brought bad without the costs.
And the letter dated February 13 2020.
San Diego gas and electric SDG anyway.
Placed on the record a compelling case for the Fccs propped decision to enable broadband at 900 megahertz.
It listed four separate uses for private LT system quote that supports wildflower wildfire risk mitigation by improving internal communications close close.
Those four were falling conductor protection system.
Updating its skated radio communication system.
Mobile work for safety and communications and weather stations.
As previously made public in its comments SDG any identifies it's spectrum focus.
As 900 megahertz and CBR us.
One other things STG any applauds the FCC for efforts to rationalize the 900 megahertz band and laments that quote SDG any faces overwhelming legal and public interest duties to serve utility customers at reasonable cost and protect against wildfires close club.
Now our investors know that these use case requirements are exactly those that drove in terex more than five years ago.
To be the first party to suggest to 900 megahertz band was a perfect called for a broad band LTE solution critical infrastructure players.
Of course, a few utility seem unable to accept the fat.
That half of the 900 megahertz spectrum in the major U.S. markets was signed either by lottery more than 30 years ago.
Or in a protracted series of auctions, where parties such as and Terex predecessor bought of rights to the licenses from the FCC for fair market value.
Additional 900 megahertz spectrum was purchased in the secondary market place over many years.
From licensees that acquired it from the FCC for free.
The thrust of their arguments seems to be that the introduction of new broadband technologies somehow forfeits those rights.
In favour of the newly awaken interest needs as utilities.
We encourage any party to review the long record and this proceeding to see just how much work and Terex is done in making the case for repurchasing. The 900 megahertz band for just the kind of LT services, which SDG, Andy and some of its fell utilities require.
Neither and terex, nor any other holder of license rights acquired by auction from the FCC or purchase from other licensees.
I would start down the long and expensive road for regulatory updating a bit spectrum.
The reward for success in that endeavor for to lose its rights in favor of companies, who sat on their hands during those options.
It'd be catastrophic to the underpinnings of the U.S. wireless market.
To conclude that the results of spectrum auctions.
Could be nullified by private enterprises seeking spectrum for freight.
And then Terex, we continue to believe that private brought been LTV at 900 megahertz is a compelling solution to the needs of the utility industry for more resilient reliable secure wireless networks.
The marketplace has served as well as the best way for potential uses spectrum to me.
And to negotiate access to that spectrum with license holders.
We expect the FCC to continue its reliance on that bedrock principal.
Now I'll turn it over to rough.
Thanks, Morgan good afternoon, everyone.
As mortgages highlighted our regulatory process is taking longer than we expected, but weve used this additional time to create widespread awareness of the critical need for private LTE networks and the ideal nature of how low band spectrum can enable these networks.
What began initially as a seasoning of the industry through our advocacy and education is evolving.
Quitman vendors service providers and customers are actively engaging with us to develop plans for solving critical use cases at 900 megahertz.
Let me focus on some of the key initiatives of this past quarter that demonstrates our progress.
Even in the absence of a final let's just see report in order our customer pipeline continues to grow a key indicators progress or the five express <unk> out licenses for 900 megahertz broadband granted by the FCC to enable various market pilots and initial network deployments.
Today Im pleased to share that a large state owned public power utility has recently filed for experimental license to pilot use cases that will enable their planned digital grid modernization.
Well I can't show the name of the entity under in D.A. I can't elaborate on the goal of that project.
Leveraging 900 megahertz broadband spectrum. This utility we'll be working to build standards based LTV private network to enhance its operational and programmatic capabilities.
We look forward to the Fccs acting expeditiously to grant this license so that we can share more on this exciting development.
We continue to see and participate in a steady pipeline of RF peas, and Arfive that are being issued by utilities and number of these utilities are seeking replacements of legacy networks to meet their expanding field area network needs.
We also continue to prioritize our federal and state efforts as part of our top down program as we work to drive utility industry regulators to understand and support the benefits that private LTE networks offer to our nation.
For example, this past month I had the opportunity presented the United States Energy Association, where USAA event that focused on broadband for critical infrastructure. The USAA membership includes major players in all sectors, the American energy industry, who directly influence grid modernization programs.
And just last week, we participated in the Winter Network conference a gathering of state public utility commissioners or Pcs.
Our board member and former FCC Commissioner and California, PC Commissioner shelf Charl participated in a panel where she discussed the role that advanced communications networks are in wildfire mitigation and other major disasters.
We met with state utility commissioners to hear first hand, how they are approaching grid modernization and wireless networks.
Also worth noting there was an educational sessions session entitled Spectrum Tutorial, one or one offered to stick commissioners further showing the topic of spectrum is being more prominent part of these regulatory discussions.
The National Cyber Security Center of excellence or NCCN, we with the National Institute of standards and technology better known as NIST has convened a specialized community of critical infrastructure stakeholders, including and Terex to focus on mitigating cyber attacks on commercial and utilities.
Scale distributed energy resources and electric distribution grid operations.
This project will create an industrial I OTI tested, including interconnected sensors data transfer and communication systems like and Terex is private LTV.
Instruments and other commercial off the shelf devices network together, we'll focus on demonstrating data integrity and malware prevention detection and mitigation by using existing commercial and open source cyber security products to reduce the industrial I would tell you attack surface for distributed energy resources.
By the end of the year. The project is expected to result in the published NCC, We practice guide for the industry.
A great example of accelerating industry dynamics is a press release Motorola issued in January announcing a private LTE product called nitrile that specifically built for 900 megahertz spectrum.
In demonstrating its confidence in 900 megahertz, Motorola stated that it anticipates the FCC, creating broadband at 900 megahertz.
And are therefore focused on leveraging their nitrile tea products for use both on 900 megahertz broadband as well as the complimentary CBR S band, that's coming to auction this summer.
We also see this new CBRN mid band spectrum has highly complimentary to and Terex is 900 megahertz spectrum.
Mid band spectrum is ideal for serving campuses and inside buildings with additional capacity and ultra low latency.
It's great to have Motorola joined the private LTE infrastructure vendor ecosystem, which importantly includes Ericsson Nokia and others and we look forward to our continued work with these key partners in offering powerful 900 megahertz based broadband solutions to our share target customers.
This Motorola announcement with showcase at the utility industries Major Technology Conference Distributech, which took place in January and San Antonio.
We took this opportunity.
To both witness and participate in this growing focus on private LTV as a critical enabler of a modernized resilient and secure electric grid.
We had discussions with its a substantial number of utilities at this event and saw a significant number of vendor boots throughout the showroom floor.
Where the demonstrations of private LT and integrated solutions, we're being displayed.
At Distributech last year private LT was seen as new concept something to be considered as a potential solution to current problems. The industry was that a discovery stage looking for potential solutions to the increasing challenges of connectivity to rapidly growing number of sensors and controls to support modernizing electric grid.
This year. However, many of these seem attendees and others were now taking action assessing the right way to implement private LT solutions to address their growing requirements last year potential customers were asking questions.
Of what private LT could do this year the focus shifted to how should a private LTE network be implemented and what options were available to solve their needs.
At Distributech I also participated in the patent titled when utilities, and telcos get together and I was joined by leaders.
From Southern company.
The New York Power authority, or NYPA, Ericsson and the National Rural Telecommunications cooperative and RTC.
At this standing room only discussion when impressed me. The most was that the case for private LT was being made multiple times directly by the utilities themselves I walked away from this panel convinced that we are now part of a seemingly self propelled industry let movement.
Utility broadband alliance or Alba also made a strong showing at distributech as many of you remember a year ago at the same event together with other fellow founding members, including a group of utilities, we launched Elba. We are collectively proud of the progress thats been made with more than 100 individuals actively involved in Alba.
Activities and working groups that joint together on private broadband initiatives.
And its initial year, but was organized as it has organized multiple face to face member events hosted a series of well attended Webinars and produced thought leadership pieces, including a recent collaborative white paper on cyber security.
In addition member task forces have collectively created RFP templates to guide utilities on the questions to ask when evaluating private LTE deployments.
That create a business model template is to help in creating support within the utility organizations and rate cases, and defining use cases and architectural frameworks that leverage private LT as the core communication network in the year ahead of utility members are targeting for it to be a utility wed utility funded and self governor.
Organization.
As president and COO My focus today is on appropriately staffing our team at all levels to meet our long term objectives and on attracting and retaining the right talent.
As we complete the last quarter of our fiscal 2020 year I'm pleased with where we are.
As an organization today.
I think we are fast approaching the end of the beginning going forward. We will continue to see adoption of private LTE networks across industries and capitalize on the growing momentum of our 900 megahertz offering.
And with that I'll turn it over Tim.
Thanks, Rob good afternoon, everyone.
Let's put Morgan and Robin noted signs continue to point to the idea that yet Ccs near against decision on the 900 megahertz proceeding and consistent with that view, we have ramped up our spectrum clearing efforts pre reporting order.
As discussed in the past we believe this proactive approach we are taking now.
Moving to faster deployment of broadband and we are focusing on those areas, where we have compelling customer opportunities.
And as mortgage shared earlier, it's important to note that as part of our clearing efforts are outfit outbound outreach to incumbents has significantly increased.
As a result, we're learning even more about the systems. They represent and are actively working to map out and locate alternative channels within the two by two portion of the 900 megahertz band or in other bands to speed up the channel transition process.
Our efforts joined by those if he WSA are designed to put us in an expedited path to clearing the portion of the band that will be utilized for broadband and in Tenda are intended to position us to meet our projected revenue goals as discussed at our Investor day in May 2019.
On the clearing front.
Third quarter of our fiscal year included $500000 of spend for spectrum acquisitions, and an additional $300000 for initial deposits in connection with future spectrum acquisitions.
Our balance sheet reflects these transactions as an increase to our intangible asset and as a reminder, prior to the important order only acquisitions will be capitalized post important order all clearing related cost will be capitalized.
Looking at the current quarter of our fiscal year to date, we spent approximately $600000 and have $3.6 million currently committed for spectrum acquisitions to be paid at the closing of the respective transactions.
Based on recent FCC proceedings I'd also like to note that we anticipate some additional spending may be required to affect broadband licensing upon a report and water.
When we report notaries voted we'll be back to investors with additional guidance on our previously announced projections.
Looking at our financial results for the third fiscal quarter ending December 31, 2019, the company reported a net loss of $8.8 million or negative 52 cents per share versus a net loss of $8.4 million or negative 57 cents per share for the same quarter in the previous year.
Last years third quarter included approximately $400000 for restructuring related charges due to realignment of our business.
Our cash position continues to be strong.
As of December 31, 2019, the company at $150 million available cash and as debt free.
Cash spend for the third quarter was approximately $7 million, which was in line with our expectations.
Moving forward operational readiness and spectrum clearing our key areas of focus for our organization.
In preparation for our operating business, we expect our spend to continue to increase as we acquire and clear additional spectrum and advance our robust customer pipeline.
That concludes our prepared remarks, I'll now turn it back over to the operator for questions.
Thank you ladies and gentlemen, the floor is now open for questions.
Many questions or comments. Please press star one on your phone now we ask that will pose your question. Please pick up your handset with me on speaker phone to provide opcom sound quality. Please hold moment pull for questions.
Your first question is coming from Mike Crawford.
Your line is.
Thank you.
With this no I guess Robbie described as a self propelled process with the utilities or any changes to the.
The company's thoughts of licensing six to 11 utilities by 2024.
Yes, Hi, Mike Thanks for the question.
No I think look the concept of self propelled US said is that we're really seeing.
Continued rising tide of interest from a broader base of utilities and more and more utilities moving through what we think of it sort of the funnel of from initial interest as I talked about to really getting engaged in figuring out the how and when they can they can deployed systems.
That's all completely supportive of the momentum that we'd expect to be seeing and really exceeding momentum we're hoping to see at this point given the projections, we put out back at Investor Day. So no I think it's still.
Completely line inline with where we think we need to be in order to be able to achieve those goals.
Okay, Great and then just if we were to.
Through a couple of assumptions like one that those are important north of that comes out in the next couple of months and that's largely in line with.
Along with the discussions that instead of farmed.
Throughout this call.
Record, making process would you then expect.
Licenses when you do start to.
Good.
To print your first few licenses for there to be.
Delay in cash received or or revenues recognized until spectrum is cleared or is it going to be a case by case basis.
Hey, Mike This is Tim.
It's going to be a case by case basis, it's really going to depend on the contract we signed with the respective customer.
Where we always clearing on is that that's at a territories.
So there could be.
Different iterations of how it could happen we could.
Clear enough to have a three by three right away, we could clear enough to have a one dot for by one dot for and then may grow into the three by three as we clear that and the pricing of a lease may vary based off of those variable. So we'll see.
Really contract by contract.
Okay, great. Thank you.
Thank you.
Your next question is coming from Simon Flannery.
Your line is lives.
Great. Thank you good evening.
So on the timing is it fair to think that this C band was sort of elephant in the room and if we can get that you know voted through next week Fad.
The wireless Bureau can sort of turned their attention to and here are the next to end the hopper is that your understanding.
Hey, five minutes Morgan, certainly certainly that that preceding was a monster.
Probably one of the most complex in the last decade or so so.
It will be really for us that to habit.
Through the Python.
And we can we can then hope that attaching and turn to ours and others that are less monumental.
Okay, and you talked a lot about three by three I think in the past you've also talked about five by five is that off the table at this point.
No, but let me, let me make sure I clarify that point.
[music].
Hi by five in every way is preferable to three by three even more so than just start dramatically, but there are very serious.
Operators operating and narrowband at 900 megahertz, and we have to take those operations.
Seriously and we this rule, making is likely to come out.
Each of those incumbents will have a choice they can they can move too.
Two by two and staying the same by by five where they can.
Move to some other portion of the spectrum 800 megahertz being the most likely where they can decide to to use that if a whole different technology altogether to maybe move from dispatch type of functionality to over the top cellular type applications that are our team of course will.
Be motivated where its practical and reasonable to move people off of 900 megahertz.
Because yes ultimately.
It makes a lot of sense for for the public interest for that spectrum to all be broadband, but that's that's a bridge too far right now.
We're we're focused on making sure that we get.
The most rapid and therefore the most.
Constructive process.
Moving incumbents and meeting that listening to their needs and meeting.
Great and I think in the past you've said that.
Pretty quickly after reporting an order you could start you could announce here first deal or whether that's a contractor and I'm a year is that still your expectation.
Yes, I mean, I think we continue to make good progress and I mentioned sort of the breadth of customers the expansion of the pipeline.
Tracking them either objectives. So I think we're still on on track to meet that specific objective.
Obviously, as we get closer to report and order it does add to the confidence of customers to be able to transact.
But as we've talked about you know these are these are complicated large entities that they're even just a formality of their approval process is significant and so getting through that process is something we're we're very focused on it but but actively involved in as well.
Let me just at.
The fact that.
[music].
No no matter, how how comfortable we are with the way. The FCC is tracking these ultra conservative organizations want to see it in writing the decision and then they can start cranking up their machinery to make decisions.
We're optimistic that when the FCC order comes out a lot of that machine will start to cranking and it ought to be able to crank simultaneously throughout the industry. We certainly have done a lot of missionary work and Spadework and many of the efforts we have been taking while we waited through this process.
Should bear fruit.
So stay tuned I think that it's hard to exaggerate how much important there will be when when we actually have the rules and then we could actually start delivering.
Broadband spectrum for.
Implementation and commercial operation.
Great. Thanks, a lot.
Thank you.
Your next question is coming from George Sutton.
Your line is life.
Good afternoon. This is Adam on for George Thanks for taking my questions. Rob could you provide some additional clarity on where things have trended with potential customers discussions in terms of structure of contracts.
Unfortunately, Adam it's a good question, but I can't give it too much because most of those were under end da until we actually have something executed we can't really disclose that the details, but I think just to kind of restate about you know the the continued to progress first of all you know each of these are bespoke transaction.
Ones with large institutions and so they're all going to have their own individual nuances. So but you know our our objective that we set out and we've talked about about trying to go for long term relationships long term leases of spectrum is absolutely still are straight down the fairway approach and we're seeing good traction.
And on those kind of.
Those kind of deals or there's going to be nuances to all of these to fit within both the commercial needs you know the delivery timing of when they want to deploy the regulatory requirements of the individual states, where the utilities have their specific.
Approval requirements and so absolutely, we'll see things differently through each of those lenses, but overall, we're still going in the same direction everything we're seeing is allowing us to go that way to say that we want to engage with long term relationships with our spectrum with these with these great credit customers.
And we're on track to do so.
Great. Thank you and then.
Along the same lines when when you've talked to potential customers have there been any new use cases utilities have generated themselves.
Yes, it really when I talk briefly about sort of the work with utility broadband Alliance I think it's a good good forum to kind of be able to see that happening and so as I mentioned at Distributech.
This past month.
There was a full day utility broadband Alliance meeting, which you know I'm happy to say, we're a member of now having helped started but now we're really just a member in that the utilities. It really taking the leadership and there's a specifically a working group there that focuses on.
On those use cases, and so they're constantly evolving.
More and more of those needs.
You know.
Specifically.
In that audience now it's not just US also is vendors and we've got a large vendor community interesting. We also have invited in and there is federated wireless that's representing the CBS opportunities that we talk about being complementary even 18 team now has joined that group, which we think is constructive as well that its representing the full gamut of options that are in the marketplace.
Yes.
But overall, we see that.
There are new use cases, coming and we've seen one of the utilities. Its joined recently has been talking about.
The necessity for drones and being able to do not want to say drawn flight as as a as a new example in use case, it's being talked about there.
We've talked about the west coast falling line conductor case that was important to them that really translates into the ability to have a situational awareness for any kind of.
Major catastrophe and so that's also becoming a more important use case I was on a panel at Distributech, where there was a lot of discussions about cyber security and the specific needs of.
What a private network will do and that's really.
Getting escalated within utilities were seeing a lot of the use cases, we saw where because of an urgent need to connect devices sensors onto networks now the cyber aspect is becoming more and more of a need I talked about the work, we're doing with the and the National Cyber Security Center of excellence.
We're seeing those use cases, starting to come into it as well.
So there's a there's a large and growing number of use cases, but but I think the key point is that it's not us bringing those the table now it's being generated by the industry for the industry and lot of that's being published by by utility broadband Alliance and so I'm pretty sure that that's information will be able to share soon.
Okay, Great and then one final question for you we noticed recently on the FCC website.
It was a lease proposal out where do we start with Motorola and sub leased by Disney and the La San Diego and Ta.
Any perspective on that and how that would potentially affect.
Realignment.
So I'm going to let Tim instead, I'll say quickly you know we have we have historical relationship with Motorola that enables them to use some of our channels for those narrowband systems that are deploying specifically on.
Campus environment. So I think I think what you probably saw was not related to a broadband deployment, but more routine pertaining to that that that agreement.
Yeah, just just to add on.
2014, we've had an agreement with Motorola where they can.
Spectrum for narrowband opportunities.
We don't expect this would they be doing with this is to be a long term hindrance to to our broadband opportunity.
But we had those relationships like with Motorola with has with Disney with Motorola and some other pockets of the country and that's what we've expected since we sign that lease at the time.
Great. Thank you.
Your next question is coming from Philip Cusick.
Your line is life.
Hi. This is we fulfill thanks for taking my question.
Two if I may have the 200 incumbents that youve.
Contacted what is the response been like were most already aware of of the issue and what eight Texas is looking to accomplish and then the second one when you talk about pipeline growth.
You know it is this your Frank RFP is your applications for experimental licenses or trials and is this pipeline does it grow and shrink or is it more linear in nature. Thanks.
So this is more and let me take a stab at the first half of that the.
The 200 or so.
Tax that we've already made.
Reflect a wide range of circumstances from what you would expect which is.
We never heard of view.
Gosh do we have a license at 900 megahertz.
That that level.
All the way up to you know.
Absolute in depth understanding of.
Of the proposal, where we want to go with it possible interest in broadband the possible interested in going to 800 megahertz instead of.
Selling the license and.
And instead, just using a sell your radio applications for for the dispatch functionality everything you can imagine, but throwing it altogether in the single bucket I would say.
Because we're so experience at doing this I mean, you've done this for literally decades.
There isn't much new under the Sun, we're seeing what we expected.
And this is Rob tier to your second question.
I'm really is or the pipeline growth, we kind of look at it in multiple ways. One is clearly the number of entities that are that are part of that and the number the amount of interest we're seeing and just as an example at Distributech. There's a number of new parties that have come up to us that are we're exploring in an hour or engaging in discussions with.
As to better understand how they can solve some of their specific needs.
The other way to measure sort of how far through the process. They are you mentioned Rps as one example, some of the utilities approach. This by getting some level understanding publishing in RF by or an RFP getting Rick responses from from numerous types of vendors and then from that going through their own discovery process to determine what is that.
I want to deploy on what timeline they want to deploy it. So we're seeing all of the above were seeing more utility is coming to table. We're seeing more RFP is that are being issued.
We're seeing.
A lot more cross fertilization across the industry and that's why I think of the point I tried to make and what I said is that these utilities uniquely as a sector are relying upon each other to learn about the key elements of how they solve the same kind of problems and so there really is an infectious process in a good way that's.
Allowing them to learn from each other and so as we have more and more utilities moving through our pipeline and getting closer to transacting with us, but also going through the pilot process. We have other utilities that are riding along learning from there from their efforts and that helps them also moved further down and we obviously see the efficiency of that but it also.
So it's a great collective effort that brings more and more.
Knowledge and interest from from a bigger cross section of utilities.
Thanks very much.
Your next question is coming from James Ratcliffe.
Your line is life.
Thank you.
One if I couldn't if I'm jumping the gun on steps discuss later and let me now.
In terms of the spend for re tuning it.
Previously about 100 under 20 million has any of that ramped up really because there's more than we've seen this ramp and free cash flow burn thus far is that still almost entirely out of us.
For the most part James that's that's ahead of US I mean I talked about.
Where we are even quarter to date.
Where we've we've spent some cash plus we've also got another roughly $3.5 million committed and that continues to grow on a daily basis as we continue to move forward on the on that on the process, but yes its.
Most of those costs are ahead of us.
Thank you.
Once again, ladies and gentlemen, if you have any questions or comments. Please press star one on your phone now.
We have no further questions from the lines.
Okay, well, thanks, everybody for for your interest and we look forward to talking pretty soon.
Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.
Yeah.