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Property and equipment:

6 Months Ended

Jun. 30, 2011

Property and equipment:

Property and equipment:

2. Property and equipment:

Depreciation and amortization expense related to property and equipment and capital leases was $14.1 million and $14.7 million for the three months ended June 30, 2010 and 2011, respectively and was $26.9 million and $29.4 million for the six months ended June 30, 2010 and 2011, respectively. In the six months ended June 30, 2010, the Company recorded an impairment charge for certain property and equipment totaling $0.6 million. There were no such charges in the six months ended June 30, 2011.

Capitalized network construction labor and related costs

The Company capitalized salaries, related benefits and equity-based compensation of employees working directly on the construction and build-out of its network of $1.4 million and $1.7 million for the three months ended June 30, 2010 and 2011, respectively and $2.9 million and $3.6 million for the six months ended June 30, 2010 and 2011, respectively.

Asset retirement obligations

In the first quarter of 2010, the Company determined that its estimates of restoration costs for its leased facility asset retirement obligations were too high based on current costs to restore and changes in the expected timing of the payment of those costs due to the extensions of lease terms. As a result, in the first quarter of 2010, the Company reduced its estimates of the cash flows that it believes will be required to settle its leased facility asset retirement obligations at the end of the respective lease terms, which resulted in a reduction to the Company’s asset retirement obligation liability. As a result of the revisions in the estimated amount and timing of cash flows for asset retirement obligations, in the three months ended March 31, 2010, the Company reduced its asset retirement obligation liability by $0.9 million with an offsetting reduction to depreciation and amortization of $0.7 million and selling, general and administrative expenses of $0.2 million.

Release of lease obligation

In the three months ended June 30, 2011 the requirements for extinguishment were met and the Company was released from an obligation under an IRU capital lease obligation totaling $2.7 million resulting in a gain. The IRU asset related to this obligation had been fully impaired in 2008 when it was determined that the IRU asset was no longer in use.

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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