Dish Network 2009 Annual Report Download - page 40

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We may pursue acquisitions and other strategic transactions to complement or expand our business that may not
be successful and we may lose up to the entire value of our investment in these acquisitions and transactions.
Our future success may depend on opportunities to buy other businesses or technologies that could complement,
enhance or expand our current business or products or that might otherwise offer us growth opportunities. We may
not be able to complete such transactions and such transactions, if executed, pose significant risks and could have a
negative effect on our operations. Any transactions that we are able to identify and complete may involve a number
of risks, including:
x the diversion of our management’s attention from our existing business to integrate the operations and
personnel of the acquired or combined business or joint venture;
x possible adverse effects on our operating results during the integration process;
x a high degree of risk involved in these transactions, which could become substantial over time, and
higher exposure to significant financial losses if the underlying ventures are not successful; and
x our possible inability to achieve the intended objectives of the transaction.
In addition, we may not be able to successfully or profitably integrate, operate, maintain and manage our newly
acquired operations or employees. We may not be able to maintain uniform standards, controls, procedures and
policies, and this may lead to operational inefficiencies.
New acquisitions, joint ventures and other transactions may require the commitment of significant capital that would
otherwise be directed to investments in our existing businesses or be distributed to shareholders. Commitment of this
capital may cause us to defer or suspend any share repurchases that we otherwise may have made.
Our business depends on FCC licenses that can expire or be revoked or modified and applications for FCC
licenses that may not be granted.
If the FCC were to cancel, revoke, suspend, or fail to renew any of our licenses or authorizations, or fail to grant our
applications for FCC licenses, it could have a material adverse effect on our financial condition, profitability and
cash flows. 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.
We are subject to digital HD “carry-one-carry-all” requirements that cause capacity constraints.
To provide any full-power local broadcast signal in any market, we are required to retransmit all qualifying
broadcast signals in that market (“carry-one-carry-all”). The digital transition required all full-power broadcasters to
cease transmission using analog signals and switch over to digital signals by June 12, 2009. The switch to digital
provides broadcasters significantly greater capacity to provide high definition and multicast programming. In March
2008, the FCC adopted new digital carriage rules that require DBS providers to phase in carry-one-carry-all
obligations with respect to the carriage of full-power broadcasters’ HD signals by February 2013 in HD local
markets. The carriage of additional HD signals on our DBS system could cause us to experience significant capacity
constraints and limit the number of local markets that we can serve. We are also uncertain about how the pending
SHVERA reauthorization legislation may affect this requirement.
In addition, the FCC is now considering whether to require DBS providers to carry broadcast stations in both
standard definition and high definition starting in 2010, in conjunction with the phased-in HD “carry-one-carry-all”
requirements adopted by the FCC. If we were required to carry multiple versions of each broadcast station, we
would have to dedicate more of our finite satellite capacity to each broadcast station, which may force us to reduce
the number of local markets served and limit our ability to meet competitive needs. We cannot predict the outcome
or timing of that proceeding. We are also uncertain about how the pending SHVERA reauthorization legislation
may affect this requirement.