Intangible Assets

12 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Wireless licenses are considered indefinite-lived intangible assets. Indefinite-lived intangible assets are not subject to amortization but instead are tested for impairment annually, or more frequently if an event indicates that the asset might be impaired. There were no impairment charges related to the Company’s indefinite-lived intangible assets during the years ended March 31, 2023, 2022 and 2021.

Intangible assets consist of the following at March 31, 2023 and 2022 (in thousands):


	Wireless Licenses
Balance at March 31, 2021	$	122,117
Acquisitions	17,843
Exchanges - licenses received	15,341
Exchanges - licenses surrendered	(4,132)

Balance at March 31, 2022	151,169
Acquisitions	12,476
Exchanges - licenses received	46,174
Exchanges - licenses surrendered	(7,775)
Balance at March 31, 2023	$	202,044

Purchases of intangible assets, including refundable deposits

During the years ended March 31, 2023, 2022 and 2021, the Company entered into agreements with several third parties in multiple U.S. markets to acquire, retune or swap wireless licenses for cash consideration (“deals”) and made Anti-Windfall Payments to the U.S. Treasury Department. The initial deposits to incumbents are recorded as prepaid expenses and other current assets on the Company’s Consolidated Statements of Balance Sheets and are refundable if the FCC does not approve the sale, retuning or swap of the spectrum. The initial deposits are transferred to other assets or intangible assets in the Company’s Consolidated Statements of Balance Sheets, as applicable, upon meeting the relevant deal milestones. The final payments related to closed retuning or swap deals are recorded as other assets on the Company’s Consolidated Statements of Balance Sheets. The final payments for license purchases or Anti-Windfall Payments are recorded as intangible assets on the Company’s Consolidated Statements of Balance Sheets.

The purchases of intangible assets, including refundable deposits, consisted of the following activity during the years March 31, 2023, 2022 and 2021 (in thousands):


	2023		2022		2021
Refundable deposits *	$	6,492	$	5,621	$	(1,986)
Retuning cost and Swaps	6,036		2,894		290
Purchases and Anti-Windfall Payments	12,476		17,843		15,640
Total	$	25,004	$	26,358	$	13,944

* The decrease in refundable deposits during the year end 2021 was related to the exchange of narrowband license discussed below.

Broadband License Exchanges

During the year ended March 31, 2023, the Company was granted by the FCC, broadband licenses for 84 counties. The Company recorded the new broadband licenses at their estimated accounting cost basis of approximately $46.2 million. In connection with receiving the broadband licenses, the Company disposed of $7.8 million related to the value ascribed to the narrowband licenses it relinquished to the FCC for the same 84 counties. The total carrying value of narrowband licenses included the cost to acquire the original narrowband licenses, Anti-Windfall Payments paid to cover the shortfall in each county and the clearing costs. As a result of the exchange of narrowband licenses for broadband licenses, the Company recorded a gain on disposal of intangible assets of $38.4 million, for the year ended March 31, 2023.

During the year ended March 31, 2022, the Company was granted by the FCC, broadband licenses for 21 counties. The Company recorded the new broadband licenses at their estimated accounting cost basis of approximately $15.3 million. In connection with receiving the broadband licenses, the Company disposed of $4.1 million related to the value ascribed to the narrowband licenses it relinquished to the FCC for the same 21 counties. The total carrying value of narrowband licenses included the cost to acquire the original narrowband licenses, Anti-Windfall Payments paid to cover the shortfall in each county and the clearing costs. As a result of the exchange of narrowband licenses for broadband licenses, the Company recorded a gain on disposal of intangible assets of $11.2 million, for the year ended March 31, 2022.

Narrowband License Exchanges

In September 2020, the Company closed an agreement with a third party for the exchange of 900 MHz licenses. Under the agreement, the Company received spectrum licenses at their estimated fair value of approximately $0.2 million and a payment of $1.2 million in cash to clear the channels received from incumbents. In January 2018, the Company received $0.6 million as a refundable deposit when the agreement was executed during the year ended March 31, 2018, and the Company is entitled to receive the remaining $0.6 million upon receipt of FCC approval and closing of the agreement in September 2020. Under the agreement, the Company transferred spectrum licenses with book value of approximately $0.3 million to the third party. The Company recognized a $1.1 million gain from disposal of intangible assets on the Company’s Consolidated Statements of Operations when the deal closed in September 2020.

The Association of American Railroads

The nation’s railroads, particularly the major freight lines, operate on six narrowband 900 MHz channels licensed to the Association of American Railroads (“AAR”). Three of these narrowband channels are located in the 900 MHz broadband segment created by the FCC in the Report and Order. As a result, in order to qualify for broadband licenses under the Report and Order, the Company will be required to provide spectrum for the relocation of the AAR channels to narrowband channels outside the 900 MHz broadband segment.

In January 2020, the Company entered into an agreement with the AAR pursuant to which the Company agreed to cancel licenses in the 900 MHz band to enable the AAR to relocate its operations, including operations utilizing the three channels located in the 900 MHz broadband segment (the “AAR Agreement”). The Report and Order provides that the FCC will make the channels associated with these licenses available to the AAR to enable the AAR to relocate their current operations. The Report and Order also provides that the FCC will credit the Company for its cancelled licenses for purposes of determining the Company’s eligibility to secure broadband licenses and the calculation of any Anti-Windfall Payments.

In accordance with the Report and Order and the AAR Agreement, the Company cancelled its licenses in June 2020. Because the Company did not receive any licenses nor monetary reimbursement in exchange for the cancellation, but only credit for purposes of determining its future eligibility and payment obligations for broadband licenses under the Report and Order, the Company recorded a $4.7 million loss from disposal of the intangible assets on the Company’s Consolidated Statements of Operations for the year ended March 31, 2021.

In August 2020, the Company closed an agreement with a third party for the exchange of 900 MHz licenses plus approximately $0.3 million for the reprogramming of their equipment. Since the licenses the Company acquired in the exchange were included in the licenses returned to the FCC in accordance with the AAR Agreement above, the $0.3 million for equipment reprogramming was recorded as additional loss from disposal of the intangible assets on the Company’s Consolidated Statements of Operations.