Ladies and gentlemen, thank you very much for standing by and welcome to the Dycom Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given to you at that time. [Operator Instructions] Also as a reminder, today's conference is being recorded. I would now like to turn the call over to your host, Mr. Steven Nielsen. Please go ahead.

Thank you, operator. Good morning, everyone. I would like to thank you for attending this conference call to review our second quarter fiscal 2020 results. Going to slide 2. During this call we will be referring to a slide presentation which can be found on our website's Investor Center main page. Relevant slides will be identified by number throughout our presentation. Today we have on the call, Tim Estes, our Chief Operating Officer; Drew DeFerrari, our Chief Financial Officer; and Ryan Urness, our General Counsel. Now I will turn the call over to Ryan Urness.

Thank you, Steve. The statements made by Company management during this call may be forward-looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including those related to the Company's outlook are based on management's current expectations, estimates and projections and are subject to risks and uncertainties which may cause actual results to differ materially from current estimates. These risks and uncertainties are more fully described in the Company's annual report on Form 10-K filed March 4th, 2019 and its other filings with the US Securities and Exchange Commission. The company assumes no obligation to update these forward-looking statement. Steve?

Thanks, Ryan. Now, moving to slide 4 and a review of our second quarter results. As we discuss our results, please note that the provision for income taxes during this quarter included $1.1 million related to a previous tax year filing. Also for the quarter ended July 28th, 2018 organic revenue amounts exclude revenues from storm restoration services. During our comments and in the accompanying slides, we exclude these items and other non-GAAP measures. We refer you to the quarterly report section of our website for a reconciliation of these non-GAAP measures to their corresponding GAAP measures. In addition, the Company has entered into a contract modification that increases the revenue produced by a large customer program. As a result, the Company recognized $11.8 million of contract revenues for services performed in prior periods and $1.8 million of related performance-based compensation expense. On an after-tax basis, these items contributed approximately $7.3 million to net income or $0.23 per common share diluted for the quarter ended July 27th, 2019. Revenue was $884.2 million, an increase of 10.6%. Organic revenue excluding storm restoration services of $3.8 million in the year-ago quarter increased 11.1%. As we deployed 1 gigabit wireline networks, wireless/wireline converged networks and wireless networks, this quarter reflected an increase in demand from four of our top five customers. Gross margins were 18.5% of revenue, reflecting the continued impacts of the complexity of a large customer program discussed previously on our first quarter fiscal 2020 call and general and administrative expenses were 7.36%. All of these factors produced adjusted EBITDA of $100.2 million or 11.3% of revenue and adjusted diluted earnings per share of $1.09 compared to $1.05 in the year-ago quarter. Liquidity was ample with cash and availability under our credit facility was $289.1 million. Now, moving to slide 5.…

Thanks, Steve and good morning everyone. Going to slide 8. Contract revenues for Q2 '20 were $884.2 million and organic revenue growth was 11.1% with strong increases from four of our top five customers. The Company entered into a contract modification that increases revenue produced by a large customer program. As a result, we recognized $11.8 million of contract revenues for services performed in prior fiscal quarters and years as well as $1.8 million of related performance-based compensation expense. On an after-tax basis, these items contributed $0.23 per common share diluted for the second quarter. Including the benefit of the contract modifications, adjusted EBITDA was $100.2 million or 11.3% of revenue and gross margins were at 18.5%. Gross margins included approximately 100 basis points of benefit from the contract modification, compared to Q2 '19, the net decline in gross margins was 112 basis points due to impacts of a large customer program during the quarter. G&A expense improved by 71 basis points compared to Q2 '19. Our lower financial performance this year resulted in a decrease in share-based compensation. Our provision for income taxes included incremental expense of $1.1 million related to a tax filing for a previous tax year. We expect our effective tax rate at 27.5% for the remainder of fiscal 2020 before any tax effects of the settlement of share based awards. Our non-GAAP adjusted diluted EPS in Q2 '20 was $1.09 per share. Now going to Slide 9. Our balance sheet reflects the strength of our business. We ended the quarter with $450 million of term loans outstanding and $65 million of revolver borrowings. Liquidity is ample at $289 million at the end of the July quarter consisting of availability from our credit facility and cash on hand. Cash flow used for operating activities was $53.6…

Thanks, Drew. Moving to slide 12. Within a growing economy, we experienced the effects of a strong industry environment and capitalized on our significant strengths. First and foremost, we maintained strong customer presence throughout our markets. Second, our extensive market presence has allowed us to be at the forefront of evolving industry opportunities. The end-market drivers of these opportunities remain firm and are strengthening. Fiber deployments enabling new wireless technologies are underway in many regions of the country. Wireless construction activity in support of expanded coverage and capacity has begun to accelerate through the deployment of enhanced macro cells and new small cells. Telephone companies are deploying fiber to the home to enable 1 gigabit high-speed connections. Cable operators are deploying fiber to small and medium businesses and enterprises. Portion of these deployments are in anticipation of the customer sales process. Fiber deep deployments to expand capacity as well as new build opportunities are underway. Dramatically increased speeds to consumers are being provisioned and consumer data usage is growing. Customers are consolidating supply chains, creating opportunities for market share growth and increasing long-term value of our maintenance and operations business. In addition, we are increasingly providing integrated planning, engineering and design, procurement and construction and maintenance services for wired and converged wireless/wireline networks. We remain encouraged that our major customers are committed to multi-year capital spending initiatives and we are confident in our strategies, the prospects for our company, the capabilities of our dedicated employees and the experience of our management team as we grow our business. Now operator, we will open the call for questions.

[Operator Instructions] And our first question comes from the line of Sean Eastman with KeyBanc Capital Markets. Please go ahead.

Hi, team. Thanks for taking my questions. I guess firstly for me. It's great to see you guys have a handle on the near-term outlook here. But looking at the fiscal fourth quarter, flat to up low-single digit revenue growth. Relative to the kind of qualitative commentary on market demand. It seems to indicate that there is a stronger growth trajectory on the horizon here. So I'm just wondering how do you guys would characterize visibility on a re-acceleration in growth here. Has it improved or is that kind of inflection point still kind of tough to call at this point?

So, Sean, I think specifically to the fourth quarter. As always, that's the quarter that has four or five holidays and that week between Christmas and New Year as well as unpredictable weather. And so I think that's always one that is not all that important to understand relative to near and intermediate term trends there just so much going on outside the businesses control. I think look, we had good progress this quarter in terms of organic revenue growth. We have the -- one customer who is committed their regulatory -- completed their regulatory commitment on fiber deployment, but yet they're happy with those customers and we're optimistic that there will be opportunities not only there, but in other parts of the business. So I think we are looking ahead to better times.

Okay, thanks. And when I look at the fiscal fourth quarter, flat to slightly up margins from a year-over-year perspective can we extrapolate that into the longer term just in terms of getting to a point where margins have stabilized to potentially improving in the quarters beyond that and or are there some other kind of considerations we should take note of? For example, I'm wondering about this contract modification, here in the second quarter and just making sure we're thinking about that correctly as it relates to the kind of margin comparable for the fiscal second quarter of next year.

Yeah. So we talked about in the last couple of quarters. We talked about the effects of a large customer program on margins and I think what we said last quarter, and we can say that again is that if you excluded that program that our margins were in line with how we've executed in past, not the best year we've ever had. But okay, and I think that those modification does provide some increased revenue going forward. It's much appreciated. But there is still plenty of work to do on that program. And then -- and then once again to look at trends in the fourth quarter given the weather holiday amount of daylight is that -- that's just a tough quarter for anybody to evaluate against near-term or intermediate term trend.

Okay. All right. I will turn it over. Thanks, Steve.

Thanks, Sean.

Thank you. And our next question comes from the line of Adam Thalhimer with Thompson Davis. Please go ahead.

Hey, good morning, guys.

Good morning, Adam.

Hey, Steve, are you peak revenue yet on that large program?

So Adam, we were asked that question last quarter and, we don't comment on individual programs, but we're comfortable that there is plenty of growth opportunities across the entirety of the business.

Okay. And the all other customers, you made a note that you're finally seeing some nice growth outside of your top five. Can you give some additional color there? What's driving that? How sustainable is that?

So we're seeing a trend across all of our customers, not only the top five to deploy more fiber, expand their fiber footprints in deeper into their networks. And we've talked on past calls about this emerging rural fiber deployments, primarily for electric co-ops. And we actually looked at those and said if we had aggregated those together, because they are typically smaller entities, but they're very active. It probably would have been our sixth or seventh customer and has grown very quickly over the last four to five quarters. So I think that's a good portion of the growth in that part of the business. We also were pleased to see TDS who has been a long time customer who has indicated that they're pretty aggressively deploying fiber both inside their ILEC footprint and outside. So we're seeing more outside of franchise opportunities not only from them, but was interesting to see that Windstream actually bought some millimeter wave spectrum in the last auction, on both inside their footprint and outside. So I think we see some more fiber opportunities even outside their traditional customer franchises from those folks and others.

Okay. And then last one from me on the cable side of the business, obviously a big revenue decline in the first half of the year. What -- what's your thought in the back half for just cable in general?

So we had one of our customers that on their call spoke specifically that they're spending on scalable infrastructure and line extensions were down in part due to the timing of planned construction and other investments. And so I think if you look at kind of where we see the third quarter right now compared to where we saw it in May, that really explains kind of the change in the slight change in view. But they -- I think they are continuing pretty dramatic growth in consumer data consumption. There was a report, just yesterday that one of our customers is now seeing an average of 300 gigabytes per month of consumption for every broadband subscriber they have. It's pretty stunning number compared to three years or four years ago. So while it's a little bit slower this year. I think that's been well understood on the street. We look forward to better year next year.

Understood. Okay. Thanks, Steve. I'll turn it over.

Thank you. And our next question comes from the line of Brent Thielman with D.A. Davidson. Please go ahead.

Hey, thanks, good morning.

Good morning, Brent.

Steve, the increase in DSOs, I understand this is associated with this large program. When do you think that starts to plateau and we kind of see some normalization and cash conversion?

I think we'll see normalization through the end of this fiscal year. I mean we're working hard at it. There has been some modifications in terms of adding some opportunities for us to more timely invoice completed work. That have been offered. So we're working hard at that. And we're working hard to get better as we've talked about for the last couple of quarters.

Okay, that's helpful. And then it looks like business with Windstream picked up from last year. I was just curious if you're seeing post petition, I guess payments coming through that.

Yeah. Their payments in, as they are undergoing restructuring are quite good and we are encouraged that not only are they paying well, but they are also investing in their business, deploying more fiber had a good subscriber not only quarter, but expect to grow broadband subscribers for the year. So we're encouraged currently, and we are encouraged looking ahead.

Okay. And my last question, Steve is more just thinking about kind of the value, Dycom brings to the customers in terms of the national footprint and kind of large and growing capacity is, if you look at the head count, as I look at some of these awards in the presentation slide where you are in multiple states. Are those -- is that -- are those individual awards to you within those individual markets for this collective awards, again just trying to kind of think about this, and in terms of the contract negotiations you have with these customers with your scale.

Well, typically the contracts are still, described regionally some time through the entirety of the state, sometimes for half of the state. Typically all of the contract sizes over the last 10 or 15 years have grown geographically. So as customers have simplified their administrative organizations. They've gone with larger territories. So they're are typically individual regions or individual states, but we have comprehensive discussions with our customers as we work through renewals and backlog was burned off a little bit in the current quarter mostly as a kind of a re-estimate of a long-term contract where the revenue is down a little bit this year, but we expect it to be higher next year and how that flow through backlog. But we feel good for the balance of the year in terms of renewal and growth in backlog.

Okay. Appreciate the color. Thank you.

Thank you. And our next question comes from the line of Alex Rygiel with B. Riley. Please go ahead.

Good morning, Steve, Drew and Tim.

Hey, Alex.

Hey, Drew, could you help us to possibly quantify the dollar value opportunity that you could pull out of receivables and working capital over the next six months?

I mean, Alex, I'll jump in here. Drew, and I've talked about this. I mean, we are working hard to normalize this. If you looked at DSO year-over-year and excluded this program, it's just up slightly. So the rest of the customer base and the rest of the revenue is in line with past performance. You could probably do the math to figure out how much cash that would release as we drive DSO from where it is back to normal. It's a big program. It's complex and so we're going to be careful, as we've talked about the last couple of quarters to get ahead of ourselves on that, but I can assure you, the entire company is working on the project.

And then there has been some talk about fourth quarter guidance. As it relates to the third quarter revenue guidance, it looks like it's down somewhat from your previous guidance. Anything in particular that's called out there?

Yeah. Alex, as we said on an earlier question, real -- if you look to the MSOs and in particular one that cited of being a little bit slower on their spending in part due to timing of plant construction is really just a timing question and that was the difference in the way we saw things in May and way we see them now. And that's a customer that has substantial plans and identify that investing in their network is strategic. There's just every once a while there is one of these modulations that we have with the customer.

And as it relates to the contract amount of the key thing in your commentary over the last number of quarters about the complexity of certain large customer program, how should we think about gross margins today relative to the more normalized level?

And Alex, it's the same comment that we made before with respect to EBITDA, but would also apply to gross margin. If you pull this program out, the rest of the business is performing reasonably well. It's not the best that we've ever done. But certainly in line with prior performance. So as we work hard on this program, there is opportunity. And as we've said in prior quarters we pointed to that complexity arising from the evolving objectives, processes and priorities. I think on the objectives and the priorities we're more settled. We still have work to do on the processes and we're spending lots of time and attention to pull the cost out associated with those evolutions.

Very helpful, thank you.

Thank you. And our next question comes from Chad Dillard with Deutsche Bank. Please go ahead.

Hi, good morning, guys.

Good morning, Chad.

So if I look back, I mean it looks like the July quarter marked the slowest, like sequential increase in labor since 2012. Should we take that as a sign that lay the labor ramp has reached a plateau or how should we think about that?

Well, Chad, I think, as always, right. As we've said before, we utilized subcontractors for portions of our construction activity, and so headcount to revenue was kind of loosely correlated. So if you think about it, we grew revenue sequentially $50 million on essentially a slight increase in headcount and we grew at $85 million year-over-year at a greater percentage than head count. So I think as we get into a different mix of business and more construction going forward, we will see headcount grow. We hope it continues to grow. We see opportunities to grow the business, but I think as we get more heavily into construction, we will see more subcontractor resources utilized rather than additional headcount.

Got you. And just to kind of continue on that, I mean based on what you're seeing your business, I mean when do you start to see that tipping point evolve, where you do see a greater mix of construction going forward is part 1. And then part 2, as it pertains to your backlog, can you give a little bit more color on what you're seeing on the wireless side, I mean are you seeing backlog growth accelerate? Any color would be very helpful?

So if we look at wireless in total, it was just short of $75 million of revenue in the quarter, which is the largest number we've ever had. So kind of a $300 million run rate. So we're pleased with the growth in that business grew both year-over-year and sequentially double digits. So that was -- that was helpful. I think we're pleased with opportunities in that business. We're just beginning to see actual 5G deployments we have in one large metropolitan market, we have just short of 100 sites, that we've done site acquisition, have gotten backhauled to and power and just waiting for radios to come in the next four to eight week. So we're actually beginning to see opportunity and revenue driven by 5G.

And just one more question. So, I realize that the ramp of one customer has resulted in complexity and lower margins and that's been going on for I guess several quarters now. And I realize that there is some that you can't control but there is probably some that you can, but, so can you just talk about that part that you can, what levers do you have to pull back and actually like mitigate the margin impact here?

Yeah. So, Chad as we've discussed previously, right. And at least as incrementally versus the last quarter, it's really around the processes and not the objectives and priorities. And so as we look at the processes, as we've talked about it before, we implement systems. First, we get ahead of it with what resources we have to, to get ahead of it. \Then we implement systems to take that cost out and it's a large growing program, and so we're having to do both at once, and we're working on reversing the working capital build associated with that complexity also. So we'd love to go into more detail. It's a pretty detailed project plan, there's lots of teams working on it, but I think that's what we're comfortable sharing today.

Great, thanks. So I'll hop back in queue.

Thank you. And our next question comes from the line of Jennifer Fritzsche with Wells Fargo. Please go ahead.

Great, thank you for taking the question. A few, if I may. Steve, you mentioned the electric co-ops becoming a larger customer in aggregate. One of the main theme from our 5G conference in June was the lack of access to power and how that kind of a tricky part of 5G. Is that -- is that what you're helping with there? Can you just comment on that? And then just I have one follow-up after that.

So Jennifer, clearly powering of all of the hundreds of thousands, if not millions of small cells associated with densification and 5G is clearly an issue. I think the industrial will figure it out, at least does. And as I said, we're actually starting to bring some 5G sites on air between now and the end of the year. What we refer to with the co-ops, so these are actually in rural America where there is often not cable service, often only dial-up service from an incumbent telco. And these co-ops are actually building on their own facilities fiber to the home networks, so it's...

Got it.

So it's literally, and I think the number that I have seen is, there's something like 12 million electric meters that are served by these co-ops across the country. And not only have they been doing this with their own funds. But we expect that there'll be active in the rural offer -- the rural digital opportunity fund. That's upcoming from the FCC.

Got it. And then if I may, about CenturyLink, CenturyLink has -- they had publicly announced that they've hired an advisor to sell their consumer business. Nothing has happened there yet. But if we went down that rabbit hole, if that were to happen, you've had a nice acceleration of growth with CenturyLink. Can you -- is most of the relationship with the consumer side? Or can you just talk about that a little bit?

So it's hard for us to comment on anything that has to do with the strategic effort by a customer. I guess, what we're seeing is that they are focused on fiber, that they are aggressively growing the fiber footprint and that we're seeing opportunities not only in the traditional ILEC business, but outside of that ILEC business. As not they and everybody else continues to focus to getting service on their own facilities rather than leased facilities. So I think we're seeing broad opportunities and we can always do better. We're working hard, but I think we've been pleased with the access we've seen to broader parts of the business beyond consumer.

Perfect. Thank you very much.

Thank you. And our next question comes from the line of Blake Hirschman with Stephens Inc. Please go ahead.

Yeah. Good morning, guys. Thanks for taking my questions. As a follow-up on the large customer program, contract modifications, are these conversations that are ongoing with the potential for further benefit going forward or is this more of a one-time deal that's come to an end with the benefits already kind of flowing through?

So I think, Blake, just to be clear as we said in our comments, this increase the revenue both retrospectively, and going forward, we still have lots of work to do, we're appreciate -- appreciative of it. But it has both past benefit and a future benefit. Beyond that, we're not going to comment on our discussions with our customers. I think as we said last quarter, as we improve the business on this large customer program, we're working hard and the best way to prove it is to show it in the numbers. And that's still our perspective on the program.

Got it. And for the fiscal 3Q and 4Q guide has that benefit with the situation there? That's been incorporated into the guidance that was --

Yeah. It's -- as once again, we appreciated it. On a retrospective basis, it was a number that we needed to provide to you folks would understand current period performance. It's certainly helpful and it's incorporated in the outlook going forward.

Got it. And then on AT&T's fiber to the home build-out that winded down the summer did the cadence or magnitude of that AT&T fiber spend impact you guys in the quarter over and above what you expected coming into it or was it kind of in line with what you were thinking?

No, I think it was completely in line with what we're thinking. We're encouraged by their commentary that they continue to see good uptake of the service as they sell into that footprint. And their comments in the past about continuing to invest in fiber going forward. The real effect, as we've said in answer to prior questions is just really around this planned timing on the MSO side.

Got it. And then lastly on the CapEx, it didn't come down too much for the year, but it did come down. Is there anything to point to there as far as why the range came down?

I mean we're being disciplined, Blake. We got work to do. As I said, the Company is focused on getting these DSOs in line and we're going to manage the other levers in the business as appropriate without hurting the business. I think we've always had a disciplined capital plan, so that if we need to make adjustments as we've done that we can do it without hurting the business and so that's what we're doing.

All right. Makes sense. Thanks a lot. I'll turn it over.

Thank you. Our next question comes from the line of Noelle Dilts with Stifel. Please go ahead.

Thanks, guys. Good morning.

Good morning, Noelle.

So, just another quick question on the contract amendment, can you just tell us the exact retrospective time period that the change covered? And can you remind us of when this contract concludes?

So two things Noelle. So in the current period and in the first quarter, just call it roughly just a little bit over $2.9 million in each of those quarters. If there is a pay that goes back to the prior fiscal years, but that's the, if that helps you understand kind of the current year impact. As we continue to work on the program, there is plenty of work to do and we continue to work through it with, there may be other opportunities. And so we're not going to get into the actual end of the contract. Because, if we do our jobs, hopefully we'll be there for a long time.

Okay, understood. And second, you know we've heard from some other folks in the industry that small cell deployments are maybe just taking a bit longer to move forward than folks had expected. Some of that associated with things you've talked about, citing challenges, engineering etc. Any chance you could give us a sense of how much work that you're doing around small cells today? And how you're thinking about the cadence of deployment moving forward?

So we have a number of customers that we do small cell activity with -- it's growing, it's not a significant piece of the business at this point. But as we look out probably over the next two or three years. I think it will be an increasing proportion of everybody's wireless spending, because particularly at millimeter wave frequencies, you've got to have lots of antennas given the propagation properties of those spectrum bands. So we think it's going up. And look, Noelle, I always look at the popular press and when they start talking about something being a problem that's usually about the time the industry is starting to get some clarity on how it's going to get better and I don't see the conversation around citing difficulties today any different than what would have occurred 20, 25 years ago for macro sites. The technology is going to provide lots of value. And if a technology provide lots of value we'll figure out how to get it deployed as a country.

Okay, thanks. And finally, any chance, Drew, you could round out top customers and other utility and other?

Sure. And Noelle, I'd point everyone on the call that end following us on to slide 6 where we've got the other top customers in the top 10. And then for the split, telco was at 73.6%, cable was at 17.4%, facility locating was at 6.1% and electrical and other was 2.9%.

Thanks.

Thank you. And our next question comes from the line of Christian Schwab with Craig-Hallum Capital Group. Please go ahead.

Hey, good morning, guys. Thanks for taking my question. Steve, I just want to confirm that the contract modification work with your large customer is complete and we should expect no more modifications in the future.

There is nothing to confirm, because that's not what we said Christian. What we said is, there was a modification in a piece of that program that had a retrospective benefit and we'll continue to have an increased revenue benefit going forward as we work through that program.

Okay. Another question along the same lines stated possibly different way then, whether it's gross margins or EBITDA margins. We talked about excess large customer program, the rest of the business being in line with historical trends. So just it's -- if we just want to think whichever you want to discuss -- but if we want to think about your opportunity to return 20% plus gross margins, is that opportunity based more heavily on future contract modifications or would that be better control of costs and processes as an opportunity to get there?

I think, Christian, we're not going to outline kind of the way we're having discussions with any customer around those topics. We are appreciative of this modification. We've got a number of efforts underway to improve our performance on the contract and there is lots of work to do. We're making progress. The program is more settled today than it was three months ago. We're encouraged by that. But there is still lots to do.

All right. One last question along the same lines, if I can beat it to death. And can we return that customer in aggregate by better process control to return to historical margin profile, the rest of your business?

So, we are working hard on the business broadly, and I wouldn't characterize it as one particular effort or dimension, because we've invested a lot. We need to earn a return on that for our investors and we're working hard to get back to that, to the profile. We've not accepted that where we are today is acceptable, because it isn't and we're working hard to change it.

Great. No other questions. Thank you.

Thank you. And we have a follow-up question from the line of Jennifer Fritzsche with Wells Fargo. Please go ahead.

Great, thank you. One, I know that focus has been on this customer -- the larger customer with the change in terms, but I think one area that I didn't hear come up, and I just wanted to confirm, is this whole, our job, as I think it's called the world of development opportunity fund, which is going to be a substantial amount of money going through some of these rural providers. How do you view that? I mean, I remember when we talked about CAFII, you talked at one time about that becoming, I think the topside customer in aggregate. Any initial thoughts there. I know it's still in process.

Well, I think a couple of things, Jennifer. So one at a little over $2 billion a year, it's an increase from where CAFII was for our customers. So it's clearly a good thing from our perspective. It broadens the opportunity set, because there may be other participants as we highlighted some of these non-traditional co-ops, electric co-ops may be able to participate. And what's interesting and this shows how strong this movement to fiber is, in rural America, we've actually seen a limited number of instances just recently, where customers that we did rural stimulus work for funded through the -- through the federal program back in 2010, '11 and '12 have actually come back with more work to do, and the remainders of their systems. So I just think this deployment as well as some of the comments, particularly from Windstream not only about fiber, but also millimeter wave spectrum, in their ILEC and then in $3 million homes adjacent. I just think it's a very strong trend and we don't see that in any way as hurting. I think it helps the business.

I'm sorry, Steve. You said this earlier, but this does require a faster speed crack than what we saw from CAFII.

Yeah, so one of the interesting things is CAFII required 10 megabits down and 1 megabit up. But now the rule is not final, it's out for comment. As I understand it, but it's centering now on 25 megabit down, 3 megabits up. Although there is a sliding scale with -- to the extent that you proposed higher bandwidth up to 1 gig, that you actually are weighted more heavily as you go through the auction and it's a fairly -- just on a quick read, it's a fairly complicated process, but clearly the government is willing to prioritize higher speeds even then 25 down and 3 up.

Okay. Operator, if we have no more questions. We appreciate everybody's time and attention on the call and we look forward to seeing you on the next call, in the week of Thanksgiving. Thank you.

Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you very much for your participation, you may now disconnect.