DIRECTV 2012 Annual Report Download - page 35

DIRECTV
Comunicaciones launched a DTH service in 2009, with substantial commercial FCC Regulation Under the Communications Act and Related Acts. The
support and cooperation from Telmex, which, due to regulatory restrictions, is not Communications Act and other related acts give the FCC broad authority to
currently permitted to provide its own video services in Mexico. These competitors regulate the operations of DIRECTV U.S.
have significant resources and have proven their ability to grow their businesses FCC regulations govern, among other issues:
rapidly. They typically focus on offering lower-cost, limited services packages in
support of their telephony and broadband offerings, which can increase our churn • the licensing of DBS and DTH satellites, earth stations and ancillary
and put pressure on our margins. Also, the existence of multiple DTH operators in authorizations;
a single market dilutes our ability to market our DTH service as an alternative to • the assignment of frequencies and orbital slots, the relocation of satellites to
cable, traditionally our principal competition. different orbital locations, the extension of licenses for existing satellites, and
In a number of markets, existing wireline telephony operators have announced the replacement of an existing satellite with a new satellite;
their intention to upgrade their infrastructure in order to provide new and • terms and conditions of assignments and authorizations, including required
enhanced services, including IPTV video programming. However, to date only a timetables for construction and operation of satellites; and
very small number of such upgrades and build outs have been actively pursued on
other than a test basis. • avoidance of interference by and to DBS/DTH operations with operations
of other entities that make use of the radio spectrum.
ACQUISITIONS, STRATEGIC ALLIANCES AND DIVESTITURES All of our satellites and earth stations are licensed by the FCC. The FCC
We review our competitive position on an ongoing basis and, from time to generally issues DTH space station licenses for a fifteen-year term and DBS space
time, consider various acquisitions, strategic alliances and divestitures, including station and earth station licenses for a ten-year term, which is less than the useful
potential wireless broadband investments or alliances, in order to continue to life of a healthy direct broadcast satellite. Upon expiration of the initial license
compete effectively, improve our financial results, grow our business and allocate term, the FCC has the option to extend a satellite operator’s license, authorize
our resources efficiently. We also consider periodically making equity investments in operation for a period of time on special temporary authority, or decline to extend
companies with which we can jointly provide services to our subscribers. the license.
For a further discussion of our mergers and acquisitions, see Note 4 of the Currently, we have several applications pending before the FCC, including
Notes to the Consolidated Financial Statements in Item 8, Part II of this Annual applications to launch and operate future satellites. In general, the FCC’s approval
Report, which we incorporate herein by reference. of these applications is required for us to continue to expand our range of service
offerings while increasing the robustness of our satellite fleet. We may not obtain
GOVERNMENT REGULATION these approvals in a timely fashion or at all.
We are subject to government regulation in the United States, primarily by the As a DBS/DTH licensee and operator we are also subject to a variety of
FCC, and similar regulatory agencies in Latin America, and by other federal, state Communications Act requirements, FCC regulations and copyright laws that could
and local authorities. We are also subject to the rules and procedures of the materially affect our business. They include the following:
International Telecommunications Union, a specialized agency of the United •Local-into-Local Service and Limitation on Retransmission of Distant
Nations, which coordinates global telecommunications networks and services. Broadcast Television Signals. The Satellite Home Viewer Act (‘‘SHVA,’’
The following is a summary of relevant regulatory issues and is not intended which in this Annual Report includes its progeny legislation, the Satellite
to describe all present and proposed government regulation and legislation affecting Home Viewer Improvement Act of 1999; the Satellite Home Viewer
our business. Extension and Reauthorization Act of 2004; and the Satellite Television
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