Dish Network 2007 Annual Report Download - page 35

Table of Contents
Our business depends substantially on FCC licenses that can expire or be revoked or modified and applications that may not be granted.
If the FCC were to cancel, revoke, suspend or fail to renew any of our licenses or authorizations, it could have a material adverse effect on our
business, financial condition and results of operations. Specifically, loss of a frequency authorization would reduce the amount of spectrum
available to us, potentially reducing the amount of programming and other services available to our subscribers. The materiality of such a loss
of authorizations would vary based upon, among other things, the location of the frequency used or the availability of replacement spectrum. In
addition, Congress often considers and enacts legislation that could affect us, and FCC proceedings to implement the Communications Act and
enforce its regulations are ongoing. We cannot predict the outcomes of these legislative or regulatory proceedings or their effect on our
business.
Our business relies on intellectual property, some of which is owned by third parties, and we may inadvertently infringe their patents and
proprietary rights.
Many entities, including some of our competitors, have or may in the future obtain patents and other intellectual property rights that cover or
affect products or services related to those that we offer. In general, if a court determines that one or more of our products infringes on
intellectual property held by others, we may be required to cease developing or marketing those products, to obtain licenses from the holders of
the intellectual property at a material cost, or to redesign those products in such a way as to avoid infringing the patent claims. If those
intellectual property rights are held by a competitor, we may be unable to obtain the intellectual property at any price, which could adversely
affect our competitive position. Please see further discussion under Item 1. Business — Patents and Trademarks
of this Annual Report on Form
10-K.
We depend on other telecommunications providers, independent retailers and others to solicit orders for DISH network services.
While we offer receiver systems and programming directly, a majority of our new subscriber acquisitions are generated by independent
businesses offering our products and services, including small satellite retailers, direct marketing groups, local and regional consumer
electronics stores, nationwide retailers, telecommunications providers and others. If we are unable to continue our arrangements with these
resellers, we cannot guarantee that we would be able to obtain other sales agents, thus adversely affecting our business.
We have substantial debt outstanding and may incur additional debt
As of December 31, 2006, our total debt, including the debt of our subsidiaries, was $6.967 billion. On February 15, 2007, we redeemed all of
our outstanding 5 3/4% Convertible Subordinated Notes due 2008 which decreased our total debt by $1.0 billion.
Our debt levels could have significant consequences, including:
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making it more difficult to satisfy our obligations;
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increasing our vulnerability to general adverse economic conditions, including changes in interest rates;
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limiting our ability to obtain additional financing;
• requiring us to devote a substantial portion of our available cash and cash flow to make interest and principal payments on our debt,
thereby reducing the amount of available cash for other purposes;
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limiting our financial and operating flexibility in responding to changing economic and competitive conditions; and
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placing us at a disadvantage compared to our competitors that have less debt.