Dish Network 2007 Annual Report Download - page 125

Table of Contents
ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
In certain circumstances the dates on which we are obligated to make these payments could be delayed. These amounts will increase to the
extent we procure insurance for our satellites or contract for the construction, launch or lease of additional satellites. Further, as of
December 31, 2006, we had not procured launches for six of the above satellites. Our obligations will increase as we procure launches for these
satellites.
Purchase Obligations
Our 2007 purchase obligations primarily consist of binding purchase orders for EchoStar receiver systems and related equipment, and for
products and services related to the operation of our DISH Network. Our purchase obligations also include certain guaranteed fixed contractual
commitments to purchase programming content.
Programming Contracts
In the normal course of business, we have also entered into numerous contracts to purchase programming content whereby our payment
obligations are fully contingent on the number of subscribers to which we provide the respective content. These programming commitments are
not included in the table above. The terms of our contracts typically range from one to ten years. Our programming expenses will continue to
increase to the extent we are successful growing our subscriber base. Programming expenses are included in “Subscriber-related expenses” in
the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).
Rent Expense
Total rent expense for operating leases approximated $69.2 million, $67.6 million and $59.1 million in 2006, 2005 and 2004, respectively.
Patents and Intellectual Property
Many entities, including some of our competitors, now have and may in the future obtain patents and other intellectual property rights that
cover or affect products or services directly or indirectly related to those that we offer. We may not be aware of all patents and other intellectual
property rights that our products may potentially infringe. Damages in patent infringement cases can include a tripling of actual damages in
certain cases. Further, we cannot estimate the extent to which we may be required in the future to obtain licenses with respect to patents held by
others and the availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights with respect
to components within our direct broadcast satellite system. We cannot be certain that these persons do not own the rights they claim, that our
products do not infringe on these rights, that we would be able to obtain licenses from these persons on commercially reasonable terms or, if
we were unable to obtain such licenses, that we would be able to redesign our products to avoid infringement.
Contingencies
Distant Network Litigation
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. Termination of these channels resulted in, among other things, a small reduction in average monthly revenue per
subscriber and free cash flow, and a temporary increase in subscriber churn. The plaintiffs in that litigation allege
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• A Canadian DBS satellite (“Ciel 2”) which is currently expected to launch during 2009 and commence commercial operation at the
129 degree orbital location. Our initial ten-year term lease for at least 50% capacity on the satellite will be accounted for as a capital
lease.