DIRECTV 2008 Annual Report Download - page 22

THE DIRECTV GROUP, INC.
Satellite To Be Launched. DIRECTV 12 is planned for launch in the second half of 2009.
DIRECTV 12 will operate from our 101⍭ WL orbital location after successful completion of in-orbit
testing. DIRECTV 12 will provide us with increased capability for local and national HD channels, as
well as capacity for new interactive and enhanced services once it becomes operational.
Satellite Risk Management. We use launch and in-orbit insurance to mitigate the potential financial
impact of satellite fleet launch and in-orbit failures unless the premium costs are considered to be
uneconomical relative to the risk of satellite failure. The insurance generally does not compensate for
business interruption or loss of future revenues or subscribers. We rely on in-orbit spare satellites and
excess transponder capacity at key orbital slots to mitigate the impact of a potential satellite failure on
our ability to provide service. However, programming continuity cannot be assured in all instances or in
the event of multiple satellite losses.
Launch insurance typically covers the time frame from ignition of the launch vehicle through
separation of the satellite from the launch vehicle. In the past, we have launched satellites without
insurance. We expect to purchase launch insurance for DIRECTV 12 covering a portion of the satellite
and launch vehicle costs in the event of a total failure. As of December 31, 2008, the net book value of
DIRECTV U.S.’ in-orbit satellites was $1,688 million, of which $1,489 million was uninsured.
Digital Broadcast Centers. To gather programming content, ensure its digital quality, and transmit
content to our satellites, we have built two digital broadcast centers, located in Castle Rock, Colorado
and Los Angeles, California. These facilities provide the majority of our national and local standard-
definition and HD programming. We have also built five uplink facilities which are used to provide HD
local channels. Our broadcast centers receive programming from content providers via satellite, fiber
optic cable and/or special tape. Most satellite-delivered programming is then digitized, encoded and
transmitted to our satellites. We designed each broadcast center and uplink facility with redundant
systems to minimize service interruptions.
Installation Network. The DIRECTV home service provider, or HSP, installation and service
network performs installation, upgrades and other service call work for us. In 2008, we entered into
several transactions that brought a significant portion of this HSP network activity in-house. We now
directly employ nearly 4,000 technicians and utilize an additional 11,000 technicians from nine
outsourced companies around the United States. The combined workforce completed approximately
93% of all in-home visits in 2008. We set the standards for the quality of installation and service,
perform quality control, manage inventory and monitor the overall service network performance for
nearly all of the third-party installation network.
Customer Service Centers. As of December 31, 2008, we used 30 customer service centers
employing over 16,000 customer service representatives. Most of these customer service centers are
operated by Convergys Customer Management Group, Inc., Precision Response Corporation, Sitel
Operating Corporation and N.E.W. Customer Service Companies, Inc. We currently own and operate
six customer service centers located in: Boise, Idaho; Tulsa, Oklahoma; Huntsville, Alabama; Missoula,
Montana; Huntington, West Virginia; and Denver, Colorado that employ approximately 5,000 customer
service representatives. Potential and existing subscribers can call a single telephone number 24 hours a
day, seven days a week, to request assistance for hardware, programming, installation, technical and
other support. We continue to increase the functionality of telephone-based and web-based self-care
features in order to better manage customer service costs and improve service levels.
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