With our frame tv recessed into the wall so the front is 1/2' recessed can we install the Ultra Arc closer than 5.5" from the bottom of the tv?
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Possibly. The Atmos speakers need to clear the TV so as to be unobstructed. See this exploded rendering of an Arc for the angle and positioning of the Atmos speakers (Arc Ultra requires the same clearance, but no clear exploded view is available):
FYI….the correct terminology is “Arc Ultra” 
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