FORWARD LOOKING STATEMENTS

This Report includes "forward-looking" statements, as that term is defined in the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission, or SEC, in its rules, regulations and releases. Forward looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These include statements regarding, among other things, our financial and business prospects, the deployment of our services, capital requirements, financing prospects, planned capital expenditures, expected cost per site, anticipated customer growth, expansion plans, expected cost savings associated with our reduction in workforce in 2008, anticipated cash balances and the completion of the exchange offer for the Existing Notes and the Mandatory Redemption. There can be no assurance that the exchange offer and consent solicitation or the Mandatory Redemption will be completed, either because the conditions to complete such transactions may not be satisfied, or otherwise. There are many risks, uncertainties and other factors that can prevent the achievement of goals or cause results to differ materially from those expressed or implied by these forward-looking statements including, among other things, negative cash flows and operating losses, additional liquidity requirements, potential loss of significant customers, downturns in the wireless communication industry, regulatory costs and restrictions, potential loss of FCC licenses, equipment supply disruptions and cost increases, competition from alternative backhaul service providers and technologies, along with those risk factors described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2008 and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 and this Quarterly Report on Form 10-Q (collectively, "Risk Factors").

The following discussion of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and other financial information appearing in our Annual Report on Form 10-K for the year ended December 31, 2008. Some of the statements in the following discussion are forward-looking statements as described above. For a variety of reasons, including those described above and in Risk Factors, our actual results may differ materially from these estimates and projections.

Company Overview

We are a leading provider of facilities-based backhaul services to wireless carriers. Facilities-based providers own or lease a substantial portion of the property, plant and equipment necessary to provide backhaul services. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center, or MSC, or other exchange point where the traffic is then switched onto a wireline telecommunications network. We utilize our comprehensive wireless spectrum assets and extensive fiber service provider relationships to provide backhaul services nationally through a hybrid radio/fiber network architecture. Our services allow wireless carriers to optimize their networks, enable significant improvements in their availability, reliability and scalability, and reduce costs, while providing a long-term solution for the increasing demand for backhaul capacity.

We compete with a range of diversified telecommunications services providers. Our competitors include i) Incumbent and Competitive Local Exchange Carriers, including AT&T, Verizon, Embarq, and Qwest, ii) wireless carriers, iii) Cable Multiple System Operators, including Cox, Time Warner Cable, Bright House and Comcast, and iv) Fiber Service Providers, including Level 3, Time Warner Telecom, Zayo Broadband, DukeNet and FPL FiberNet.

As of September 30, 2009, we had 153 employees, of whom 107 were in Engineering, Market/Field Operations and Network Operations the payroll-related costs of which are classified as Cost of Service Revenues; 8 were in Sales and Marketing; and 38 were in General and Administrative.

As of September 30, 2009:

† We provide service to 6,433 billing customer locations at 2,803 billing sites in 13 markets;

† We have master service agreements with nine U.S. wireless carriers;

† We hold separate service agreements with both MCI Communications, Verizon Business and Qwest Communications, as their fixed wireless partner on the General Services Administration Networx contract to provide fixed wireless government-grade primary transport and physically diverse network transport services. The service agreement with Verizon Business also allows us to provide government-grade services for other Verizon Business-managed contracts; and

† We own a national spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum licenses, including over 740 MHz in the top 20 U.S. metropolitan areas and, in the aggregate, approximately 1.55 billion channel pops calculated as the number of channels in a given area multiplied by the population, as measured in the 2000 census, covered by these channels. We believe our spectrum portfolio represents one of the largest and most comprehensive collections of millimeter wave spectrum in the U.S. Our licenses extend over substantially all of the continental U.S., covering areas with a total population of approximately 300 million.

As an important part of our business strategy, we seek to:

(1) leverage our existing network and customer relationships by increasing utilization of existing assets;

(2) continue to improve the efficiency of our network and reduce network expenses;

(3) sell additional bandwidth to our customers;

(4) expand our markets based on identified demand;

(5) continue to develop innovative solutions that meet the needs of our customers, and

(6) allocate capital efficiently by balancing new site and market growth.

The growth of our business depends substantially on the condition of the wireless communications industry. The willingness of customers to purchase our services is affected by numerous factors, including:

(1) market demand for wireless services;

(2) availability of alternative services at better prices;

(3) predictability of our deployment schedules, and

(4) quality of our services.

In order to provide backhaul services to our customers, we have constructed networks in 13 markets. As we continue to expand our markets, we incur significant upfront costs for pre-development site evaluation, site leases, cost of new capital equipment and construction costs. These expenses are incurred well in advance of receiving revenues from customers.

During the third quarter of 2009, we achieved the following significant financial and operational milestones:

† Average monthly revenue per billing site grew 4% to $1,931 in the third quarter of 2009 from $1,860 in the second quarter of 2009;

† Billing customer locations grew 2% to 6,433 at September 30, 2009 from 6,332 at June 30, 2009;

† Billing sites were flat at 2,803 at September 30, 2009 compared to 2,795 at June 30, 2009; and

† Adjusted EBITDA was a loss of $3.2 million in the third quarter of 2009 essentially unchanged from the second quarter of 2009. See "-Results of Operations-Non-GAAP Financial Measures" below for a reconciliation of Adjusted EBITDA to net income (loss).

As of September 30, 2009, we had deployed 3,118 sites, of which 2,803 had billing customers. A deployed site may not yet be billing for various reasons including:

† We have sold service at that site, but have not yet commenced providing service to the customer; or

† We have not yet sold any service at that site, but the site is located in a market in which wireless carriers who are our customers operate but with whom we may not have yet secured a commitment for this specific market.

Our business plan depends on our expectation that most, if not all, sites will generate revenue within the useful life of the site sufficient to fully recover our investment in property and equipment. If we are unable to generate sufficient revenues from these sites in the future, our business, financial condition and results of operations would be adversely affected. To date, our operating expenses have exceeded our revenues. We have generated operating and net losses and negative cash flows and expect to generate operating and net losses and negative cash flows for the next few years. (See "Liquidity and Capital Resources" below).

Service Revenues

We generate revenue by charging a monthly recurring charge based on the amount of bandwidth traffic carried across our network. Increasing revenues on a per-billing site basis is one of our most important objectives. Revenue per billing site, shown in the Performance Measures table on page 28, is a key operating metric reflecting our ability to scale and leverage our existing network. The duration of our customer contracts are generally for three or five years.

Traffic grows as we construct new sites for customers, sell to new customers at existing sites, or sell incremental bandwidth to existing customers. The average monthly revenue generated per billing site increased to $1,931 in the third quarter of 2009 from $1,860 in the second quarter of 2009. We intend to continue to focus on site-level margins and project return on investment calculations and maintain our focus on cost reductions.

For the three and nine months ended September 30, 2009 and 2008, the following customers accounted for a significant portion of our revenues:

                 Three Months Ended        Nine Months Ended
                   September 30,             September 30,
                  2009        2008          2009        2008

AT&T Mobility         39 %        38 %          38 %        41 %
Sprint Nextel         20 %        35 %(1)       20 %        32 %(1)
Clearwire             15 %         - (1)        15 %         - (1)
T-Mobile              15 %        16 %          15 %        15 %

Accounts receivable from these customers comprised the following percentages of our total accounts receivable balances at September 30, 2009 and December 31, 2008:

                September 30, 2009   December 31, 2008

AT&T Mobility                   35 %                27 %
Sprint Nextel                   15 %                52 %
Clearwire                       21 %                 -
T-Mobile                        19 %                12 %

Costs and Expenses

The major components of our cost of service revenues are:

† Leasing. We incur charges for site lease expense for space leased at our sites. For lease arrangements that have rent escalation provisions, we account for lease expense on a straight-line basis over the lease term.

† Fiber Service Providers. We pay charges to our fiber service providers for the purchase and lease of fiber.

† Field Technicians. We incur costs for engineering and maintenance personnel expenses including stock-based compensation.

† Other. We incur costs for site evaluation and design, site maintenance, power, program and project management, costs related to unsuccessful site acquisitions that are incurred during deployment and personnel costs to monitor the network.

We expect cost of service revenues to increase in future periods as we execute our business plan to grow our network operations.

Construction of our network operations is a complex process involving the interaction and assembly of multiple components including internal labor, third party costs and equipment costs. We regularly assess the realizability of costs accumulated in construction-in-progress as we execute our network build-out plans. During the three months ended September 30, 2009 and 2008, we recorded impairment charges of $0.2 million and $0.9 million, respectively, related to this process which is included in cost of service revenues. During the nine months ended September 30, 2009 and 2008, these impairment charges were $0.4 million and $14.3 million, respectively.

Sales and marketing expenses are comprised primarily of compensation and related benefits, including stock-based compensation and travel expenses.

General and administrative expenses primarily consist of compensation and related benefits including stock-based compensation, recruiting fees, travel expenses, professional fees and insurance. The increased general and administrative expense in the Condensed Consolidated Statements of Operations in 2009 compared to 2008 was primarily the result of i) increased consulting fees, including approximately $0.6 million related to the debt exchange offer described at Note 14, Subsequent Events, in the Notes to Condensed Consolidated Financial Statements and ii) the reclassification of seven employees from sales and marketing and cost of service revenues to general and administrative as their responsibilities changed.

Depreciation and amortization expenses primarily consist of depreciation related to deployed network sites and the amortization of certain intangible assets. We expect depreciation expense to increase in future periods as a result of deploying and commencing depreciation on additional sites.

As a result of a decline in our market capitalization below the carrying value of our equity during the quarter ended March 31, 2008, we believed an indicator of impairment of goodwill existed and, accordingly, performed an interim review of the value of our goodwill. In the quarter ended March 31, 2008, we concluded that the carrying value of goodwill was fully impaired and recorded an impairment charge of $86.1 million, reducing the fair value of goodwill to zero at March 31, 2008. See Note 6, Impairment of Goodwill, in the Notes to Condensed Consolidated Financial Statements for additional information.

Interest income and interest expense are primarily the result of interest earned on investment of cash proceeds and interest cost incurred on the outstanding balance of Existing Notes. See Note 7, Convertible Senior Secured Notes, in the Notes to Condensed Consolidated Financial Statements for additional information regarding the Existing Notes.

As a result of the gain on early extinguishment of debt realized on our repurchases of Existing Notes during the first nine months of 2009 as described in Note 7, Convertible Senior Secured Notes, in the Notes to Condensed Consolidated Financial Statements, we recorded a state income tax provision of $0.4 million during the second quarter of 2009. In the first quarter of 2009, we recorded a $1.5 million income tax benefit and a corresponding reduction of the deferred income tax liability. See Note 10, Income Taxes, in the Notes to Condensed Consolidated Financial Statements for additional information.

Challenges Facing Our Business

In addition to Risk Factors, there are various challenges facing our business. These include acquiring new customers on new and existing sites, deploying new sites in a predictable manner, scaling our business and managing growth, the concentrated nature of our customers, the emerging nature of our market, the weakened state of the U.S. economy and the variability in our stock price.

Acquiring customers on new and existing sites in a timely fashion is critical to our ability to generate an appropriate return on the capital that we invest, particularly since we incur significant costs in preparing sites to become operational. In certain cases, these costs are incurred well in advance of having committed revenue from a customer. Our business, financial condition and results of operations will be negatively affected if we do not obtain sufficient revenues from constructed sites.

Deploying new sites in a predictable manner can be challenging given the difficulties in dealing with numerous landlords in order to lease space on sites, complying with the various zoning and permitting laws of different cities or districts, and managing the contractors involved with construction, program and project management. We have taken steps to reduce deployment unpredictability by engaging with large, well-established, turnkey vendors that are experienced in these activities. Additionally, we concentrate on selecting sites owned by major tower operators with whom we already have agreements, which we believe will help minimize the risk of failing to negotiate a definitive lease for a site.

We are a growing company, and hiring qualified personnel and developing processes and systems rapidly are necessary in order to grow successfully. If we cannot hire qualified employees, manage our growth and develop these systems and processes successfully, our business could be adversely affected.

We are a relatively new entrant into a highly concentrated market with few potential customers in any particular market. Maintaining and growing our existing relationships with the leading wireless carriers and developing new relationships with other carriers are critical to our success.

We operate in an emerging market. Our future success depends on an increased demand for wireless services for voice and other mobile broadband services such as transmissions of photos or videos and internet communication.

We have built flexibility into our spending by reducing capital expenditures, general and administrative and sales and marketing expenses. However, our ability to pay our expenses and make payments due on our Existing Notes and, if issued, our Interim Notes or New Notes, depends on our future performance, which will be affected by financial, business, economic, legislative and other factors, many of which are beyond our control. The overall weakness in the U.S. economy may inhibit our ability to grow at the level needed to fully service our Existing Notes and, if issued, our Interim Notes or New Notes as scheduled. In addition, the sharp decline in our stock price from the fourth quarter of 2008 and the continuing variability of our stock price may create a negative perception with current and prospective customers which could adversely affect our business.

Results of Operations

Presented below are selected statements of operations data for the three and nine months ended September 30, 2009 and 2008 that have been derived from our unaudited condensed consolidated financial statements. You should read this information together with the unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Report. Our historical results are not necessarily indicative of the results that are expected in future periods.