Dish Network 2011 Annual Report Download - page 46

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36
36
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 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. The carriage of
additional HD signals on our pay-TV service 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
have to dedicate more of our finite satellite capacity to each broadcast station. We cannot predict the outcome or
timing of that rulemaking process.
There can be no assurance that there will not be deficiencies leading to material weaknesses in our internal
control over financial reporting.
We periodically evaluate and test our internal control over financial reporting to satisfy the requirements of Section
404 of the Sarbanes-Oxley Act. On April 26, 2011, we completed the Blockbuster Acquisition. We are currently
integrating policies, processes, people, technology and operations for the combined company. Management will
continue to evaluate our internal control over financial reporting as we execute integration activities. Except as
discussed above, our management has concluded that our internal control over financial reporting was effective as
of December 31, 2011. If in the future we are unable to report that our internal control over financial reporting is
effective (or if our auditors do not agree with our assessment of the effectiveness of, or are unable to express an
opinion on, our internal control over financial reporting), investors, customers and business partners could lose
confidence in the accuracy of our financial reports, which could in turn have a material adverse effect on our
business, investor confidence in our financial results may weaken, and our stock price may suffer.
We may face other risks described from time to time in periodic and current reports we file with the SEC.
Item 1B. UNRESOLVED STAFF COMMENTS
None.