The telescope guy, lack of sound, and witnesses stating that it moved really slow suggests that they were small planes flying at a high altitude. I would not discount witnesses saying it was close to the ground, but a good formation at a height and separation that you have never seen before may have given the impression of being low to the ground. A more serious problem with this theory is that the lights were really bright, which leads back to a flare theory. The problem with the flare theory is that they last up to 2 minutes according to spec sheet, not 40, and they do not zoom off in the distance.
To correct something I said above: the flares were in a group of 7, and certainly not a V shape, but a downward sloping as they were dropped in sequence. The lasted for 2 minutes in the video.
This is a good article from the local newspaper which shows there is a lot of contradicting information (including the telescope).
Here's a 2008 documentary about the pheonix lights.
It's interesting that people can't figure out what it is.
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