Dish Network 2010 Annual Report Download - page 37

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30
30
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:
• 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;
• possible adverse effects on our operating results during the integration process;
• 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
• 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, restrict, significantly condition, 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
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 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 affects 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 FCC has adopted 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 markets in which DISH Network elects to provide local channels in HD. In
addition, STELA has imposed accelerated HD carriage requirements for noncommercial educational stations on
DBS providers that do not have a certain contractual relationship with a certain number of such stations. DISH
Network has entered into an agreement with a number of PBS stations to comply with the requirements. DISH
Network has also challenged the constitutionality of this provision but has not prevailed in its effort to obtain
temporary injunctive relief. The carriage of additional HD signals on our DBS system could cause us to experience
significant capacity constraints and prevent us from carrying additional popular national programs and/or carrying
those national programs in HD.
In addition, there is a pending rulemaking before the FCC regarding whether to require DBS providers to carry all
broadcast stations in a local market in both standard definition and HD if they carry any station in that market in
both standard definition and HD. If we were required to carry multiple versions of each broadcast station, we would