What changed in this filing

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Item 1A. Risk Factors

2024-02-16 compared with 2023-02-16 · 85 added, 61 removed, 294 unchanged (33% of the section changed)

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In addition, competition based on network speed may increase as customer demand for higher speeds increases.

UScellular anticipates that these competitive factors may continue to result in losses of retail connections, and may cause the prices for services and products to decline and the costs to compete to increase.

UScellular’s primary competitors are national or global telecommunications and cable companies that are larger than UScellular, possess greater financial and other resources, possess more extensive coverage areas and more spectrum within their coverage areas, and market other services with their communications services that UScellular does not offer.

These competitive factors have resulted in losses of retail connections and UScellular anticipates that they will continue to do so.

Similarly, these competitive pressures have caused the prices for services and products to decline and the costs to compete to increase and UScellular anticipates that they will continue to do so.

UScellular’s competitors include national or global telecommunications and cable wireless companies that are larger than UScellular, possess greater financial and other resources, possess more extensive coverage areas and more spectrum within their coverage areas, and market other services with their communications services that UScellular does not offer.

UScellular and its competitors are actively marketing their deployment of 5G and, as a result, are raising consumer awareness of the technology.

If UScellular cannot keep pace with its competitors in deploying 5G or other comparable offerings, or if UScellular's deployment of 5G technology does not result in significant incremental revenues, UScellular's financial condition, results of operations or ability to do business could continue to be adversely affected.

If UScellular cannot keep pace with its competitors in deploying 5G or other comparable offerings, or if UScellular's deployment of 5G technology does not result in significant incremental revenues, UScellular's financial condition, results of operations and ability to do business could continue to be adversely affected.

In addition, new technologies, services and products that are more commercially effective than the technologies, services and products offered by UScellular may be developed and create new sources of competition.

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There can be no assurance that UScellular will be able to compete successfully in this environment.

Sources of competition to UScellular’s business typically include three to four competing wireless telecommunications service providers in each market, wireline telecommunications service providers, cable companies, resellers (including MVNOs), and providers of alternative telecommunications services.

Competition from cable companies has increased in recent periods, as they have continued to expand their presence in the wireless industry and have offered more competitive pricing.

Sources of competition to UScellular’s business typically include at least four competing wireless telecommunications service providers across UScellular's service area, wireline telecommunications service providers, cable wireless companies, resellers (including MVNOs), and providers of alternative telecommunications services.

In particular, competition from cable wireless companies has increased in recent periods, as they have continued to expand their presence in the wireless industry and have offered more competitive pricing.

Many of UScellular’s wireless competitors and other competitors have substantially greater financial, technical, marketing, sales, purchasing and distribution resources than UScellular.

Competition in the tower industry is also challenging, as UScellular competes with public and private tower companies, wireless carrier tower alliances, private equity sponsored tower companies, and owners of non-communications sites such as utility towers, rooftop structures, water towers, and other alternative structures.

Many of these competitors are larger than UScellular, have greater financial and other resources, have more advantageous tower locations than UScellular, have greater capacity on their towers, and have more scale and coverage nationwide than UScellular – such factors could result in an inability to acquire or build additional towers, difficulty in leasing tower space, or cause lease revenue to decline in the future.

2) Changes in roaming practices or other factors could cause UScellular's roaming revenues to decline from current levels, roaming expenses to increase from current levels and/or impact UScellular's ability to service its customers in geographic areas where UScellular does not have its own network, which could have an adverse effect on UScellular's business, financial condition or results of operations.

UScellular’s service revenues include roaming revenues related to the use of UScellular’s network by other carriers’ customers who travel within UScellular’s coverage areas.

Changes in FCC rules or actions, industry practices or the network footprints of carriers due to mergers, acquisitions or network expansions could have an adverse effect on UScellular’s roaming revenues.

For example, consolidation among other carriers which have network footprints that currently overlap UScellular’s network, the expansion of other carriers' network coverage in UScellular's footprint, and/or lower roaming rates with other carriers are expected to continue to decrease future roaming revenues for UScellular.

Changes in FCC rules or actions, industry practices or the network footprints of carriers could have an adverse effect on UScellular’s roaming revenues.

For example, the expansion of other carriers' network coverage in UScellular's footprint and/or lower roaming rates with other carriers could continue to decrease future roaming revenues for UScellular.

Similarly, UScellular's customers can access another carrier’s network automatically only if the other carrier allows UScellular's customers to roam on its network.

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In addition, UScellular’s wireless technology may not be compatible with technologies used by other carriers, which may limit the ability of UScellular to enter into voice or data roaming agreements with such other carriers.

Carriers whose customers roam on UScellular’s network could switch their business to new operators, limit their high-speed usage or, over time, move traffic to their own networks.

Carriers whose customers roam on UScellular’s network could switch their business to new operators, limit their high-speed usage or move traffic to their own networks.

Changes in roaming usage patterns, rates for roaming usage, or roaming relationships with other carriers could continue to have an adverse effect on UScellular’s roaming revenues and/or expenses.

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This presents a risk to UScellular in that, to the extent UScellular is not able to enter into economically viable roaming arrangements with these other carriers, this could impact UScellular’s ability to service its customers in geographic areas where UScellular does not have its own network.

3) A failure by UScellular to obtain access to adequate radio spectrum to meet current or anticipated future needs and/or to accurately predict future needs for radio spectrum could have an adverse effect on UScellular’s business, financial condition or results of operations.

UScellular’s business depends on the ability to use portions of the radio spectrum licensed by the FCC.

UScellular could fail to obtain access to sufficient spectrum capacity, including spectrum needed to support 5G technology, in new or existing markets, whether through FCC auctions or other transactions, in order to meet the anticipated spectrum requirements associated with increased demand for existing services, especially increases in customer demand for data services and network speed, and to enable deployment of next-generation services.

UScellular believes that this increased demand for data services and network speed reflects a trend that will continue for the foreseeable future.

Data usage, including usage under unlimited plans, could exceed current forecasts resulting in a need for increased investment in spectrum or other network components.

UScellular could fail to accurately forecast its future spectrum requirements considering changes in plan offerings, customer usage patterns, technology requirements and the expanded demands of new services.

Such a failure could have an adverse impact on the quality of UScellular’s services or UScellular’s ability to roll out such future services in some markets, could require that UScellular curtail existing services in order to make spectrum available for next-generation services, or UScellular could be effectively capped in increasing market share.

As spectrum constrained providers gain customers, they use up their network capacity.

Since they lack spectrum, they can respond to demand only by adding cell sites, which is capital intensive, adds fixed operating costs, is limited by zoning considerations, and ultimately may not be cost effective.

Further, a spectrum constrained provider will generally not be able to achieve the data speeds that other competitors with more spectrum are able to provide.

UScellular may acquire access to spectrum through a number of alternatives, including acquisitions, exchanges and participation in spectrum auctions.

UScellular may participate in spectrum auctions conducted by the FCC in the future.

As required by law, the FCC has conducted auctions for wireless spectrum licenses to use some parts of the radio spectrum.

The decision to conduct auctions, and the determination of what spectrum frequencies will be made available for auction and the determination of geographic size of wireless spectrum licenses, are made by the FCC pursuant to laws that it administers.

The FCC may not be able to allocate spectrum sufficient to meet the demands of all those wishing to obtain wireless spectrum licenses for new market entry or to expand their spectrum holdings to meet the expanding demand for data services or to address other spectrum constraints.

Due to factors such as geographic size of wireless spectrum licenses and auction bidders that may raise prices beyond acceptable levels, UScellular may not be successful in FCC auctions in obtaining access to the spectrum that it believes is necessary to implement its business and technology strategies.

Access to wireless spectrum licenses won in FCC auctions may not be available on a timely basis.

Such access is dependent upon the FCC actually granting wireless spectrum licenses won, which can be rescinded or delayed for various reasons, including but not limited to exceeding spectrum ownership and attribution limits, and safety concerns due to interference with other spectrum bands.

Furthermore, newly licensed spectrum may not be available for immediate use since the radio operations of incumbent users, including in some cases government agencies, may need to be relocated to other portions of the radio spectrum, and/or the newly licensed spectrum may be subject to sharing and coordination obligations.

UScellular also may seek to acquire radio spectrum through purchases and exchanges with other spectrum licensees.

However, UScellular may not be able to acquire sufficient spectrum through these types of transactions, and UScellular may not be able to complete any of these transactions on favorable terms.

3) An inability to attract diverse people of outstanding talent throughout all levels of the organization, to develop their potential through education and assignments, and to retain them by keeping them engaged, challenged and properly rewarded could have an adverse effect on UScellular's business, financial condition or results of operations.

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Due to competition, limited supply, and/or rising wage levels for qualified management, technical, sales and other personnel, there can be no assurance that UScellular will be able to continue to attract and/or retain people of outstanding potential for the development of its business.

In addition, a remote or hybrid working model and applicability of health protocols could negatively affect talent acquisition and retention.

In addition, a person's expectation of an in-office, remote or hybrid working model could negatively affect talent acquisition and retention.

The loss of existing key personnel due to competition, wage levels and/or retirements, the failure to recruit highly skilled and diverse personnel in a timely and cost-effective manner, the inability to foster and maintain a diverse and inclusive work environment, or failure to maintain its commitment to environmental and social responsibility could have an adverse effect on UScellular’s business, financial condition or results of operations.

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4) UScellular’s smaller scale relative to larger competitors that may have greater financial and other resources than UScellular could cause UScellular to be unable to compete successfully, which could adversely affect its business, financial condition or results of operations.

There has been a trend in the telecommunications and related industries towards consolidation of service providers through acquisitions, reorganizations and joint ventures.

This trend could continue, leading to larger competitors over time.

UScellular has smaller scale efficiencies compared to larger competitors.

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▪ Low profit margins and returns on investment that are below UScellular’s cost of capital;

▪ Increased operating costs due to lack of leverage with vendors;

▪ Increased operating and capital expenditure costs due to lack of leverage with vendors;

▪ Inability to timely and successfully deploy 5G or other wireless technologies, or to realize significant incremental revenues from their deployment;

▪ Limited opportunities for strategic partnerships as potential partners are focused on wireless companies with greater scale and scope;

▪ Limited opportunities for strategic partnerships as potential partners are focused on telecommunications companies with greater scale and scope;

▪ Limited opportunities for bundling wireless service with other services such as home internet;

▪ Limited access to content, as well as limited ability to obtain acceptably priced content;

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▪ Limited ability to influence industry standards;

▪ Limited ability to acquire or build additional towers;

▪ Reduced ability to invest in research and development of new services and products;

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▪ Demand for or usage of services, particularly data services;

▪ Demand for leasing space on a tower;

▪ Consumer preferences, including type of wireless devices;

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▪ The pricing of services, including an increase in price-based competition;

▪ The pricing of tower leases that can be charged to third parties;

▪ Inflationary pressures on costs without corresponding price increases for UScellular's services;

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▪ The costs of providing services and products.

6) A failure by UScellular to obtain access to adequate radio spectrum to meet current or anticipated future needs and/or to accurately predict future needs for radio spectrum could have an adverse effect on UScellular’s business, financial condition or results of operations.

UScellular’s business depends on the ability to use portions of the radio spectrum licensed by the FCC.

UScellular could fail to obtain access to sufficient spectrum capacity, including spectrum needed to support 5G and future technologies, in new or existing markets, whether through FCC auctions or other transactions, to meet the anticipated spectrum requirements associated with increased demand for existing services, especially increases in customer demand for data services and network speed, and to enable deployment of next-generation services.

UScellular believes that this increased demand for data services and network speed reflects a trend that will continue for the foreseeable future.

Data usage, including usage under unlimited plans, could exceed current forecasts resulting in a need for increased investment in spectrum or other network components.

UScellular could fail to accurately forecast its future spectrum requirements considering changes in plan offerings, customer usage patterns, spectrum build-out and technology requirements and the expanded demands of new services.

Such a failure could have an adverse impact on the quality of UScellular’s services or UScellular’s ability to roll out such future services in some markets, could require that UScellular curtail existing services to make spectrum available for next-generation services, or UScellular could be effectively capped in increasing market share.

As spectrum constrained providers gain customers, they use up their network capacity.

Further, a spectrum constrained provider will generally not be able to achieve the data speeds that other competitors with more spectrum are able to provide.

UScellular may acquire access to spectrum through a number of alternatives, including acquisitions, exchanges and participation in spectrum auctions.

UScellular may participate in spectrum auctions conducted by the FCC in the future.

As required by law, the FCC has conducted auctions for wireless spectrum licenses to use some parts of the radio spectrum.

The FCC currently does not have authority to conduct spectrum auctions.

Access to wireless spectrum licenses won in FCC auctions may not be available on a timely basis.

UScellular also may seek to acquire radio spectrum through purchases and exchanges with other spectrum licensees.

However, UScellular may not be able to acquire sufficient spectrum through these types of transactions, and UScellular may not be able to complete any of these transactions on favorable terms.

7) Advances or changes in technology could render certain technologies used by UScellular obsolete, could put UScellular at a competitive disadvantage, could reduce UScellular’s revenues or could increase its costs of doing business.

The telecommunications industry is experiencing significant changes in technologies and services expected by customers, as evidenced by evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new services and products, and enhancements and changes in end-user requirements and preferences.

Further, fixed-mobile convergence services that combine wireline broadband services with mobile services represent a competitive threat.

If the trend toward convergence continues, UScellular is at a competitive disadvantage to larger competitors, including cable companies, the national wireless carriers and other potential large new entrants with much greater financial and other resources in adapting to such convergence.

Advances in technology could change the amount of tower space needed by wireless companies.

Further, fixed-mobile bundled services that combine wireline broadband services with mobile services represent a competitive threat.

If the trend toward bundling continues, UScellular is at a competitive disadvantage compared to larger competitors, including cable companies, the national wireless carriers and other potential large new entrants with much greater financial and other resources in adapting to such bundling.

Future technological changes or advancements may enable other wireless technologies to equal or exceed UScellular’s current levels of service and render its system infrastructure obsolete.

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▪ Competition for acquisition targets and the ability to acquire or exchange businesses at reasonable prices;

▪ Inability to make acquisitions that would achieve sufficient scale to be competitive with competitors with greater scale;

▪ Inability to make acquisitions that would achieve sufficient scale or substantial benefit to be competitive with competitors with greater scale;

▪ Possible lack of buyers for businesses or assets that UScellular desires to divest and the ability to divest or exchange such businesses or assets at reasonable prices;

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▪ Inability to successfully incorporate acquired assets and rights into UScellular’s service offerings;

▪ Inability to utilize acquired wireless spectrum;

▪ Inability to maintain uniform standards, controls, procedures and policies;

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Further, key suppliers may experience supply chain challenges beyond their control that result in difficulties providing the services and products typically requested by UScellular on a timely basis.

If these key suppliers (i) experience product availability shortages, (ii) require extended lead times to fulfill orders, (iii) experience financial difficulties or file for bankruptcy or experience other operational difficulties or (iv) deem UScellular non-strategic and not develop or sell services and products to UScellular, particularly where technical requirements differ from those of larger companies, they may not provide equipment, services or content to UScellular on a timely basis, or at all, or they may otherwise fail to honor their obligations to UScellular.

If these key suppliers (i) experience product availability shortages, (ii) require extended lead times to fulfill orders, (iii) experience financial difficulties or file for bankruptcy or experience other operational difficulties or (iv) deem UScellular non-strategic and do not develop or sell services and products to UScellular, particularly where technical requirements differ from those of larger companies, they may not provide equipment, services or content to UScellular on a timely basis, or at all, or they may otherwise fail to honor their obligations to UScellular.

Furthermore, consolidation among key suppliers may result in less competition, higher prices, the discontinuation of equipment and/or services typically purchased by UScellular or the discontinuation of support for equipment owned by UScellular.

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If overall demand for wireless devices or the mix of demand for wireless devices is significantly different than UScellular’s expectations, UScellular could face inadequate or excess supplies of particular models of wireless devices.

This could result in lost sales opportunities or an excess supply of device inventory.

This could result in lost sales opportunities or an excess supply of device inventory or network equipment that may need to be written down, depreciated, or disposed of for a loss.

If network equipment is not available or requires extended lead times due to supply chain challenges, or if overall demand for wireless services or the mix of demand for wireless services is significantly different than UScellular’s expectations, UScellular may not be able to adequately maintain a network that supports customer demand.

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All of this is capital intensive and challenging.

The increased provision of data services has introduced significant demands on UScellular’s network and also has increased complexities related to network management.

Further, the increased provision of data services on UScellular’s networks has created an increased level of risk related to quality of service and data speeds.

The increased provision of data services has introduced significant demands on UScellular’s network and also has increased complexities related to network management, which creates an increased level of risk related to quality of service and data speeds.

This is due to the fact that many customers increasingly rely on data communications to execute and validate transactions.

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Financial Risk Factors

13) Uncertainty in UScellular’s future cash flow and liquidity or the inability to access capital, deterioration in the capital markets, changes in interest rates, other changes in UScellular’s performance or market conditions, changes in UScellular’s credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to UScellular, which could require UScellular to reduce its construction, development or acquisition programs, reduce the amount of wireless spectrum licenses acquired, and/or reduce or cease share repurchases.

13) Uncertainty in UScellular’s or TDS' future cash flow and liquidity or the inability to access capital, deterioration in the capital markets, changes in interest rates, other changes in UScellular’s or TDS' performance or market conditions, changes in UScellular’s or TDS' credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to UScellular, which has required and could in the future require UScellular to reduce or delay its construction, development or acquisition programs, reduce the amount of wireless spectrum licenses acquired, divest assets or businesses, and/or reduce or cease share repurchases.

UScellular operates a capital-intensive business.

Historically, UScellular has used internally-generated funds and also has obtained substantial funds from external sources for general corporate purposes.

In the past, UScellular’s existing cash and investment balances, funds available under its financing agreements, and cash flows from operating and certain investing and financing activities, including sales of assets or businesses, provided sufficient liquidity and financial flexibility for UScellular to meet its normal day-to-day operating needs and debt service requirements, to finance the build-out and enhancement of markets and to fund acquisitions.

There is no assurance that this will be the case in the future.

It may be necessary from time to time to increase the amount of permissible borrowings under its financing agreements, to put in place new credit agreements, or to obtain other forms of financing in order to fund potential expenditures.

UScellular’s liquidity would be adversely affected if, among other things, UScellular is unable to obtain short or long-term financing on acceptable terms, interest rates increase, UScellular makes significant spectrum license purchases, UScellular makes significant capital investments, UScellular makes significant business acquisitions, the Los Angeles SMSA Limited Partnership (LA Partnership) discontinues or significantly reduces distributions compared to historical levels, or Federal USF and/or other regulatory support payments decline.

UScellular’s liquidity would be adversely affected if, among other things, cash flows from operations significantly decline, UScellular is unable to obtain short or long-term financing on acceptable terms, UScellular is not able to comply with certain debt covenants or UScellular is unsuccessful in negotiating related consents, waivers, or amendments, interest rates increase, UScellular makes significant spectrum license purchases, UScellular makes significant capital investments, UScellular makes significant business acquisitions, the Los Angeles SMSA Limited Partnership (LA Partnership) and other minority-owned partnerships discontinue or significantly reduce distributions compared to historical levels, or Federal USF and/or other regulatory support payments decline.

UScellular's liquidity may also be adversely affected by changes in the liquidity of TDS that impact TDS' or UScellular's ability to comply with certain debt covenants or if TDS or UScellular is unsuccessful in negotiating related consents, waivers, or amendments.

These or other developments at TDS may negatively affect UScellular's ability to obtain short or long-term financing on acceptable terms or obtain favorable terms and conditions from third-party vendors.

UScellular’s credit rating currently is sub-investment grade.

UScellular has incurred negative free cash flow (defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment and less Cash paid for software license agreements) at times in the past and this could occur in the future.

UScellular may require substantial additional capital for, among other uses, funding day-to-day operating needs including working capital, acquisitions of providers of wireless telecommunications services, spectrum license or system acquisitions, capital expenditures, debt service requirements, the repurchase of shares, or making additional investments.

UScellular may require substantial additional capital for, among other uses, acquisitions of providers of telecommunications services or products, spectrum license or system acquisitions, capital expenditures, the repurchase of shares, or making additional investments.

There can be no assurance that sufficient funds will continue to be available to UScellular or its subsidiaries on terms or at prices acceptable to UScellular.

Insufficient cash flows from operating activities, changes in UScellular's credit ratings, defaults of the terms of debt or credit agreements, uncertainty of access to capital, deterioration in the capital markets, reduced regulatory capital at banks which in turn limits their ability to borrow and lend, other changes in the performance of UScellular or in market conditions or other factors could limit or restrict the availability of financing on terms and prices acceptable to UScellular, which could require UScellular to reduce its acquisition, capital expenditure and business development programs, reduce the acquisition of wireless spectrum licenses, and/or reduce or cease share repurchases.

Insufficient cash flows from operating activities, changes in UScellular's credit ratings, defaults of the terms of debt or credit agreements, uncertainty of access to capital, deterioration in the capital markets, reduced regulatory capital at banks which in turn limits their ability to lend, other changes in the performance of UScellular or in market conditions or other factors could limit or restrict the availability of financing on terms and prices acceptable to UScellular, which could require UScellular to reduce its acquisition, capital expenditure and business development programs, reduce the acquisition and development of wireless spectrum licenses, divest assets and/or reduce or cease share repurchases.

UScellular cannot provide assurance that circumstances that could have a material adverse effect on its liquidity or capital resources will not occur.

TDS’ credit rating from nationally recognized credit agencies may impact UScellular’s credit rating as, given UScellular’s ownership structure, the rating agencies often consider rating actions related to TDS and UScellular in tandem.

To the extent that TDS' credit rating is downgraded, it may adversely affect UScellular's credit rating, which could result in the impacts described above.

14) UScellular has a significant amount of indebtedness which could adversely affect its financial performance and in turn adversely affect its ability to make payments on its indebtedness, comply with terms of debt covenants and incur additional debt.

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This could in turn cause the affected lenders to accelerate the repayment of principal and accrued interest on any outstanding debt under such agreements and, if they choose, terminate the agreement.

If appropriate, UScellular may request an amendment to one or more credit agreements to adjust financial covenants in order to provide additional financial flexibility to UScellular, and may also seek other changes to such agreements.

If appropriate, UScellular may request an amendment to one or more credit agreements to adjust financial covenants to provide additional financial flexibility to UScellular, and may also seek other changes to such agreements.

There is no assurance that the lenders will agree to any amendments.

If the lenders agree to amendments, this may result in additional payments or higher interest rates payable to the lenders and/or additional restrictions.

Restrictions in such debt instruments may limit UScellular’s operating and financial flexibility.

Restrictions with such debt instruments may limit UScellular’s operating and financial flexibility.

As a result, UScellular’s level of indebtedness, restrictions contained in debt instruments and/or possible breaches of covenants, defaults, and acceleration of indebtedness could have an adverse effect on UScellular’s business, financial condition, revenues, results of operations and cash flows.

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UScellular’s focus on the U.S.

wireless telecommunications industry, together with its positioning relative to larger competitors with greater resources within the industry, may represent increased risk for investors due to the lack of diversification.

wireless telecommunications industry, together with its sub-scale position relative to larger competitors with greater resources within the industry, may represent increased risk for investors due to the lack of diversification.

This could have an adverse effect on UScellular’s ability to attain and sustain long-term, profitable revenue growth and could have an adverse effect on its business, financial condition or results of operations.

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Regulatory, Legal and Governance Risk Factors

17) TDS and UScellular have initiated a process to explore a range of strategic alternatives for UScellular and there can be no assurance that any strategic alternative will be successfully identified or completed, that any such strategic alternative will result in additional value for UScellular and its shareholders, or that the process will not have an adverse impact on UScellular's business or financial statements.

On August 4, 2023, TDS and UScellular announced that the Boards of Directors of both companies decided to initiate a process to explore a range of strategic alternatives for UScellular.

This comprehensive process could result in a diversion of management's attention from UScellular's existing business;

a failure to achieve financial and operating objectives;

the failure to retain key personnel, customers, business partners or contracts;

and volatility in UScellular's stock price.

In addition, this process has already resulted in the incurrence of significant expense - this is expected to continue.

It is possible that any outcomes of the strategic alternatives review could change the composition of UScellular's long-lived assets, how UScellular may derive cash flows from these assets and may result in uncertainty related to asset recoverability.

This may impact UScellular's asset groups for purposes of assessing wireless spectrum licenses and/or property, plant and equipment for impairment and may require in the near term an impairment assessment to be performed which may result in an impairment.

There can be no assurance that such comprehensive process will result in any strategic alternative of any kind being successfully identified or completed or that the process or any outcomes of the process will not have an adverse impact on UScellular's business or financial statements.

18) Failure by UScellular to timely or fully comply with any existing applicable legislative and/or regulatory requirements or changes thereto could adversely affect UScellular’s business, financial condition or results of operations.

UScellular’s operations are subject to varying degrees of regulation by the FCC, state public utility commissions and other federal, state and local regulatory agencies and legislative bodies.

Changes in the administration of the various regulatory agencies and legislative bodies could result in different policies with respect to many federal laws and regulations, including but not limited to changes to fiscal and tax policies, trade policies, tariffs on import goods and climate change.

Various regulatory agencies and legislative bodies could implement different policies with respect to many federal laws and regulations, including but not limited to changes to fiscal and tax policies, trade policies, tariffs on import goods and climate change.

New or amended regulatory requirements could increase UScellular’s costs and divert resources from other initiatives.

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New regulatory mandates or enforcement may require unexpected or increased capital expenditures, lost revenues, higher operating expenses or other changes.

Court decisions and rulemakings could have a substantial impact on UScellular’s operations, including rulemakings on broadband access to the internet, intercarrier access compensation, state and federal support funding and court decisions regarding the FCC's universal service fund program or, more broadly, the scope of authority of the federal agencies that regulate UScellular.

Litigation and different objectives among federal and state regulators could create uncertainty and delay UScellular’s ability to respond to new regulations.

Further, wireless spectrum licenses are subject to renewal by the FCC and could be revoked in the event of a violation of applicable laws or regulatory requirements.

Also, although FCC rules relating to net neutrality have been repealed, the FCC and federal and state legislators may seek to reinstate net neutrality in some form and state legislators and regulators are seeking to or have already enacted state net neutrality laws and regulations.

Interpretation and application of these rules, including conflicts between federal and state laws, may result in additional costs for compliance and may limit opportunities to derive profits from certain business practices or resources.

Also, although FCC rules relating to net neutrality have been repealed, on October 19, 2023, the FCC adopted a draft Notice of Proposed Rulemaking (NPRM) that proposes to reinstate such rules and reclassify broadband internet access service as a telecommunications service under Title II of the Communications Act of 1934.

In the interim, some state legislators and regulators are seeking to or have already enacted state net neutrality laws and regulations, and it is unclear whether more states will seek to do so now that the FCC has announced its intent to reinstate net neutrality rules.

Interpretation and application of these rules and of rules relating to other recent NPRMs issued by the FCC (for example, with respect to digital discrimination), including conflicts between federal and state laws, may result in additional costs for compliance and may limit opportunities to derive profits from certain business practices or resources.

UScellular attempts to timely and fully comply with all regulatory requirements.

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While there is uncertainty, UScellular expects that regulatory support payments will likely decline in future periods, and there is no assurance that UScellular will qualify for future regulatory support programs.

If regulatory support is discontinued or reduced from current levels, or if receipt of future regulatory support is contingent upon making certain network-related expenditures, this could have an adverse effect on UScellular’s business, financial condition or operating results.

Adding to this uncertainty are a series of court cases challenging the constitutionality of the universal service fund program that establishes and administers these regulatory support payments.

Telecommunications providers pay a variety of surcharges and fees on their gross revenues from interstate and intrastate services, including USF fees and common carrier regulatory fees.

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Depending on a range of factors, these or similar proceedings could impose restraints on UScellular’s current or future manner of doing business.

20) The possible development of adverse precedent in litigation or conclusions in professional studies to the effect that radio frequency emissions from wireless devices and/or cell sites cause harmful health consequences, including cancer or tumors, or may interfere with various electronic medical devices or frequencies used by other industries, could have an adverse effect on UScellular's business, financial condition or results of operations.

Media reports and certain professional studies have suggested that certain radio frequency emissions from wireless devices may be linked to various health problems, including cancer or tumors, and may interfere with various electronic medical devices, including hearing aids and pacemakers.

21) The possible development of adverse precedent in litigation or conclusions in professional or environmental studies to the effect that potentially harmful emissions from devices or network equipment, including but not limited to radio frequencies emitted by wireless signals, may cause harmful health or environmental consequences, including cancer, tumors or otherwise harmful impacts, or may interfere with various electronic medical devices or frequencies used by other industries, could have an adverse effect on UScellular's business, financial condition or results of operations.

Media reports and certain professional studies have suggested that certain potentially harmful emissions from devices or network equipment, including but not limited to radio frequencies emitted by wireless signals, may cause harmful health or environmental consequences, including cancer, tumors or otherwise harmful impacts, and may interfere with various electronic medical devices, including hearing aids and pacemakers.

There may also be safety concerns related to frequencies used by wireless devices interfering with frequencies used by other industries, including but not limited to, the concerns of the Federal Aviation Administration regarding potential interference of 5G deployment with altimeters used by aircraft, which could impact deployment of certain wireless spectrum.

UScellular is a party to and may in the future be a party to lawsuits against wireless carriers and other parties claiming damages for alleged health effects, including cancer or tumors, arising from wireless phones or radio frequency transmitters.

Concerns over radio frequency emissions may discourage use of wireless devices or expose UScellular to potential litigation.

In addition, the FCC or other regulatory authorities may adopt regulations in response to concerns about radio frequency emissions.

In addition, the FCC or other regulatory authorities may adopt regulations in response to concerns about radio frequency or harmful network equipment emissions.

Any resulting decrease in demand for wireless services, costs of litigation and damage awards or regulation could have an adverse effect on UScellular’s business, financial condition or results of operations.

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These include cyber-attacks intended to wrongfully obtain private and valuable information, or cause other types of malicious events, including denial of service attacks which may cause UScellular's services to be disrupted or unavailable to customers.

The increasing number of associates working remotely increases risks associated with data handling and vulnerability management.

The increased number of associates working remotely increases risks associated with data handling and vulnerability management.

The rapid evolution and increased adoption of artificial intelligence technologies may intensify UScellular's cybersecurity risk.

UScellular maintains administrative, technical and physical controls, as well as other preventative actions, to reduce the risk of security breaches.

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Although UScellular has implemented and continues to enhance its protection and recovery measures in response to such attacks, these efforts may be insufficient to prevent a material denial of service attack in the future.

Cybersecurity of this Form 10-K for additional information.

26) Disruption in credit or other financial markets, a deterioration of U.S.

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The extent of the impact of public health emergencies on UScellular's business, financial condition and results of operations will depend on the severity and duration of the emergency, actions taken by governmental authorities and other possible direct and indirect consequences, all of which are uncertain and cannot be predicted.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors