DIRECTV 2010 Annual Report Download - page 36

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satellites that would operate in the same DBS uplink and downlink March 18, 2002, which apply to eight of our in-orbit satellites. We believe
frequency bands as us, from orbital positions located in between those now that we are in compliance with all of these requirements and expect that we
assigned to the DBS service. This rulemaking follows applications by SES will continue to be able to comply with them going forward, but the
and Spectrum Five LLC to operate tweener satellites. Under rules that the requirements for end-of-life disposal could result in a slight reduction in the
FCC is considering, a provider could, by complying with certain technical operational life of each new satellite.
restrictions, operate a satellite in between two orbital locations where we •Geographic Service Rules. The FCC requires DBS licensees to comply
have already positioned our satellites without completing coordination of its with certain geographic service obligations intended to foster the provision
operations with us and without demonstrating that such operations would of DBS service to subscribers residing in the states of Alaska and Hawaii.
not ‘‘affect’’ us as that term is defined by the ITU. We have opposed this We believe that we are in compliance with these rules although, in the past,
proposal, and believe that tweener satellites as proposed by applicants would some have argued otherwise to the FCC. The FCC has not acted on
cause interference to our current and planned operations and impose a petitions filed several years ago by the State of Hawaii and an Alaska
significant constraint on the further growth of our DIRECTV U.S. DBS satellite television dealer. We cannot be sure that the FCC will agree with
service. We cannot predict what if any action the FCC may take or the our view that we are in compliance with the agency’s geographic services
effect of such a proceeding on our business. rules, or that the FCC will not require us to make potentially cumbersome
On November 29, 2006, despite the pendency of the tweener satellite and costly changes to our offerings. The FCC has also adopted similar rules
rulemaking and over our opposition, the FCC’s International Bureau for the 17⁄24 GHz BSS service.
granted Spectrum Five’s application to operate a tweener satellite at the •FCC Conditions Imposed In Connection With the Liberty and News
114.5o WL orbital location, only 4.5o away from our DBS satellites Corporation Transactions. In approving Liberty’s 2008 acquisition of News
operating at the 110o WL and 119o WL orbital locations. While the Bureau Corporation’s equity investment in us, the FCC imposed a number of
limited Spectrum Five’s operations to levels below those at which the ITU regulatory conditions on us and Liberty, some of which directly or indirectly
deems one DBS system to ‘‘affect’’ another in the absence of agreement affected our business. In granting authority for subsequent transactions in
from all affected DBS operators (including us), the Bureau’s grant of 2009 and 2010, the FCC conditioned its approval on continued compliance
Spectrum Five’s application prior to coordination could ultimately permit with those conditions. Accordingly, the FCC has imposed on us program
Spectrum Five to operate at levels that would cause interference to our carriage conditions intended to prevent discrimination against all forms of
operations. On February 1, 2008, the full FCC denied reconsideration of unaffiliated programming; and certain program access conditions intended
the International Bureau’s order, but clarified that, if Spectrum Five is to ensure non-discriminatory access to much of the programming carried on
unable to coordinate its tweener satellite, it must file for a modification of the DIRECTV service. In particular, we may be required to submit to
its authorization and demonstrate that its proposed operational parameters ‘‘baseball style’’ arbitration if we cannot arrive at terms for carriage of our
would not exceed the ITU trigger for coordination. To date, Spectrum Five regional sports network programming with an MVPD. We cannot predict
has neither engaged in negotiations to coordinate its tweener system nor what effect our compliance with or the FCC’s enforcement of these
filed for modification of its authorization as directed by the FCC. Instead, it conditions will have on our business.
recently sought extension of the November 29, 2010 deadline for
completion of its first satellite. • Potential Regulation of Set-Top Boxes. Cable operators are subject to a
wide variety of regulation of their set-top boxes, including a prohibition on
The FCC has also adopted rules that require satellite operators to take so-called ‘‘integrated’’ security and non-security functions. The FCC has
certain measures to mitigate the dangers of collision and orbital debris. exempted DTH satellite operators from such rules, but has been urged to
Among other things, these rules impose certain requirements for satellite eliminate that exemption. Were it to do so, DIRECTV may be required to
design and end-of-life disposal maneuvers for all satellites launched after
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