DIRECTV 2007 Annual Report Download - page 23

THE DIRECTV GROUP, INC.
ACQUISITIONS, STRATEGIC ALLIANCES AND DIVESTITURES
We review our competitive position on an ongoing basis and, from time to time, consider various
acquisitions, strategic alliances and divestitures, including potential wireless broadband investments or
alliances, in order to continue to compete effectively, improve our financial results, grow our business
and allocate our resources efficiently. We also consider periodically making equity investments in
companies with which we can jointly provide services to our subscribers.
GOVERNMENT REGULATION
We are subject to government regulation in the United States, primarily by the FCC, and similar
regulatory agencies in Latin America and, to a certain extent, by the legislative branches, other federal
agencies, state and local authorities in the countries where we operate. We are also subject to the rules
and procedures of the International Telecommunications Union, or ITU, a specialized agency of the
United Nations within which governments and the private sector coordinate global telecommunications
networks and services. Depending upon the circumstances, noncompliance with legislation or
regulations promulgated by these entities could result in the suspension or revocation of our licenses or
registrations, the termination or loss of contracts or the imposition of contractual damages, civil fines
or criminal penalties.
This section sets forth a summary of regulatory issues pertaining to our operations in the United
States and is not intended to describe all present and proposed government regulation and legislation
affecting the MVPD industry or our business.
FCC Regulation Under the Communications Act and Related Acts. The Communications Act and
other related acts give the FCC broad authority to regulate the operations of our company.
The ownership and operation of our DBS/DTH system is regulated by the FCC primarily for:
• the licensing of DBS and DTH satellites, earth stations and ancillary authorizations;
• the assignment of frequencies and orbital slots, the relocation of satellites to different orbital
locations or the replacement of an existing satellite with a new satellite;
• compliance with the terms and conditions of assignments and authorizations, including required
timetables for construction and operation of satellites;
• avoidance of interference by and to DBS/DTH operations with operations of other entities that
make use of the radio spectrum; and
• compliance with the Communications Act and FCC rules governing U.S.-licensed DBS and DTH
systems.
The FCC grants authorizations to satellite operators that meet its legal, technical and financial
qualification requirements. The FCC conditions such authorizations on satisfaction of ongoing due
diligence, construction, reporting and related obligations.
All of our satellites and earth stations are or have been licensed by the FCC. Currently, three of
our satellites are licensed by the government of Canada. While the FCC generally issues DTH space
station licenses for a fifteen-year term, DBS space station and earth station licenses are generally issued
for a ten-year term, which is less than the useful life of a healthy direct broadcast satellite. Upon
expiration of the initial license term, the FCC has the option to renew a satellite operator’s license or
authorize an operator to operate for a period of time on special temporary authority, or decline to
renew the license. If the FCC declines to renew the operator’s license, the operator is required to cease
operations and the frequencies it was previously authorized to use would revert to the FCC.
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