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Wireless Underground Sensor Networks (WUSNs) are an emerging type of wireless sensor networks (WSNs), where sensor nodes are located under the ground and communicate through soil. The major challenge in the development of efficient communication protocols for WUSNs is the characterization of the underground channel. So far, none of the existing models fully capture all the components of electromagnetic signal propagation in the soil medium. In this paper, three major components that influence underground communication are identified: direct, reflected, and lateral waves, where the latter has not been analyzed for WUSNs so far. Accordingly, a closed- form three-wave (3W) channel model is developed based on EM propagation principles of signals through soil. The 3W channel model is shown to agree well with both underground testbed experiments and EM analysis based on Maxwell's equations, which cannot be represented in closed-form.