Dish Network 2005 Annual Report Download - page 26

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signals in Alaska and Hawaii. We cannot be sure that these requirements will not affect us adversely by requiring us
to devote additional resources to serving these two states.
A La Carte. Some Members of Congress have proposed the imposition of indecency restrictions on satellite and
cable providers. Others, together with the Chairman of the FCC, have suggested that satellite and cable providers be
required to offer some or all programming on an individual, or “a la carte” basis. We cannot predict the effect any
such obligations would have on our business.
Emergency Alert System. The Emergency Alert System (“EAS”) requires participants to interrupt programming
during nationally-declared emergencies and to pass through emergency-related information. The FCC recently
released an order requiring satellite carriers to participate in the “national” portion of EAS. It is also considering
whether to mandate that satellite carriers also interrupt programming for local emergencies and weather events. We
cannot be sure that this requirement will not affect us adversely by requiring us to devote additional resources to
complying with EAS requirements.
Other Communications Act Provisions
Rules Relating to Broadcast Services. The FCC imposes different rules for “subscription” and “broadcast”
services. We believe that because we offer a subscription programming service, we are not subject to many of the
regulatory obligations imposed upon broadcast licensees. However, we cannot be certain whether the FCC will find
in the future that we must comply with regulatory obligations as a broadcast licensee, and certain parties have
requested that we be treated as a broadcaster. If the FCC determines that we are a broadcast licensee, it could
require us to comply with all regulatory obligations imposed upon broadcast licensees, which are generally subject
to more burdensome regulation than subscription television service providers.
Public Interest Requirements. Under a requirement of the Cable Act, the FCC imposed public interest
requirements on DBS licensees. These rules require us to set aside four percent of our channel capacity exclusively
for noncommercial programming for which we must charge programmers below-cost rates and for which we may
not impose additional charges on subscribers. This could displace programming for which we could earn
commercial rates and could adversely affect our financial results. The FCC has generally not reviewed all aspects of
our methodology for processing public interest carriage requests, computing the channel capacity we must set aside
or determining the rates that we charge public interest programmers. We cannot be sure that if the FCC were to
review these methodologies it would find them in compliance with the public interest requirements.
Plug and Play. The FCC adopted the so-called “plug and play” standard for compatibility between digital television
sets and cable systems. That standard was developed through negotiations involving the cable and consumer
electronics industries, but not us, and we are concerned that it may impose certain onerous “encoding rules” on all
multi-channel video programming distributors, including us, and that the standard and its implementation process
favor cable systems. We have filed a petition for review of the FCC’s “plug and play” order with the federal Court
of Appeals for the District of Columbia Circuit on various grounds, but we cannot be sure that the court will not
uphold the FCC’s decision.
Closed Captioning. In 2005, the FCC initiated a rulemaking proceeding seeking comments on whether its rules that
require broadcasters, DBS providers and cable operators to transmit closed captioned content should be revised. We
currently do not have the capability of captioning every channel that we carry and rely on the program originators to
perform this task. No technology exists that can be applied outside the program originator’s facility to determine if
a program is correctly captioned. If we are required to monitor every one of the thousands of programs that we
carry to ensure accurate captioning, we will bear substantial equipment, personnel and other related costs.
The Satellite Home Viewer Improvement Act and Satellite Home Viewer Extension and Reauthorization Act
Opposition to Delivery of Distant Signals. On October 20, 2006, a District Court in Florida entered a permanent
nationwide injunction prohibiting us from offering distant network channels to consumers effective December 1,
2006. Distant networks are ABC, NBC, CBS and Fox network channels which originate outside the community
where the consumer who wants to view them, lives. We have turned off all of our distant network channels and are
no longer in the distant network business. The ruling does not impact in any way our ability to provide local