Dish Network 1998 Annual Report Download - page 37

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Service-Delivery Systems
We have defined service-delivery systems as all internal systems necessary to deliver DISH Network
programming to our subscribers. During the inventory phase we initially identified our set-top boxes, compression and
conditional access systems at our digital broadcast center, DBS satellites and third-party billing system as systems with
potential Year 2000 issues.
Given the interdependent nature of the receiver and broadcast systems used to deliver our service, we
previously implemented a smaller, offline version of our overall system to aid in the evaluation and test of hardware
and software changes that normally occur over time. This system gives us the ability to perform “real-time” testing of
the various elements of the system by simulating the year 2000 rollover, and confirming system operation. This ability
to perform accurate offline simulations has provided a tremendous benefit to our Year 2000 test process.
We have completed initial testing of our set-top receivers. During these tests, the dates in the broadcast
system, and hence the set-top receivers were rolled forward to each of the dates and times affected by the Year 2000
issue. We deemed these initial tests successful, as no problems were detected during thorough testing of the set-top
receivers when the dates were rolled forward. These tests also affirm the integrity of the broadcast systems supplying
the set-top receivers with critical operational system information. As new technology and software are integrated into
our set-top receivers, we will perform additional testing to attempt to ensure continued Year 2000 readiness.
In addition to the practical testing performed above, we have completed an independent inventory and
assessment of the systems at our digital broadcast center and are currently in the remediation phase of our Year 2000
readiness plan. The remediation phase of the plan is expected to be complete by April 1999. We expect to perform
validation and testing of communications between our digital broadcast center and our DBS satellites during the third
quarter of 1999. The validation and testing of our digital broadcast center is not expected to cause interruption of
programming to DISH Network subscribers.
During the assessment of our DBS satellites, we determined that our satellites do not operate under a calendar-
driven system. Therefore, we do not expect changes in dates and times to affect the operation of our DBS satellites.
We are currently working with the vendor of our third-party billing system to attempt to ensure its Year 2000
readiness. This vendor has indicated it has completed all remediation activities and is currently in the final stages of
testing/validation. Subsequent to completion of its testing/validation activities, the vendor has indicated it will
contractually certify its Year 2000 readiness during the second quarter of 1999, however we can not provide any
assurance in this regard.
Third-Party Systems
We also are currently assessing our vulnerability to unexpected business interruptions due to the failure of
third-parties to remediate Year 2000 readiness issues associated with products or services on which our business relies.
In connection with this assessment, we sent letters to third-party business partners, suppliers and vendors which we
deemed significant requesting that they certify their Year 2000 readiness. To date, we have received responses from
approximately 70% of these vendors. We are presently in the process of contacting our critical suppliers and vendors
who have either not responded or have not responded adequately to our requests for proof of certification. We
presently expect to complete this process by April 1999 and will continue to follow-up on unresolved issues thereafter.
There can be no assurance that third-parties who have responded, or will respond, to our request regarding Year 2000
readiness have responded, or will respond, accurately or satisfactorily, or that anticipated Year 2000 actions set forth in
their responses will be properly conducted.
Contingency Planning
We also are involved in limited contingency planning. In the event that previously undetected Year 2000
issues arise, contingency plans will be used to try to mitigate potential system problems. Our internal financial and
administrative and service-delivery contingency plan includes making back-up copies of certain systems as well as
using standby power generators at our digital broadcasting center. With respect to other third-party systems, we will
continue to contact our critical vendors in order to obtain certification of their Year 2000 readiness. However, no