Dish Network 2012 Annual Report Download - page 6

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x It may be difficult for a third party to acquire us, even if doing so may be beneficial to our shareholders,
because of our ownership structure.
x We are controlled by one principal stockholder who is also our Chairman.
Legal and Regulatory Risks Affecting our Business
x Our business depends on certain intellectual property rights and on not infringing the intellectual property
rights of others.
x We are party to various lawsuits which, if adversely decided, could have a significant adverse impact on
our business, particularly lawsuits regarding intellectual property.
x Our ability to distribute video content via the Internet involves regulatory risk.
x Changes in the Cable Act, and/or the FCC’s rules that implement the Cable Act, may limit our ability to
access programming from cable-affiliated programmers at non-discriminatory rates.
x The injunction against our retransmission of distant networks, which is currently waived, may be reinstated.
x We are subject to significant regulatory oversight, and changes in applicable regulatory requirements,
including any adoption or modification of laws or regulations relating to the Internet, could adversely affect
our business.
x Our business depends on FCC licenses that can expire or be revoked or modified and applications for FCC
licenses that may not be granted.
x We are subject to digital high-definition (“HD”) “carry-one, carry-all” requirements that cause capacity
constraints.
x There can be no assurance that there will not be deficiencies leading to material weaknesses in our internal
control over financial reporting.
x We may face other risks described from time to time in periodic and current reports we file with the
Securities and Exchange Commission, or SEC.
All cautionary statements made herein should be read as being applicable to all forward-looking statements
wherever they appear. Investors should consider the risks described herein and should not place undue reliance on
any forward-looking statements. We assume no responsibility for updating forward-looking information contained
or incorporated by reference herein or in other reports we file with the SEC.
Unless otherwise required by the context, in this report, the words “DISH Network,” the “Company,” “we,” “our”
and “us” refer to DISH Network Corporation and its subsidiaries, “EchoStar” refers to EchoStar Corporation and its
subsidiaries, and “DISH DBS” refers to DISH DBS Corporation and its subsidiaries, a wholly-owned, indirect
subsidiary of DISH Network.
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PART I
Item 1. BUSINESS
OVERVIEW
DISH Network Corporation was organized in 1995 as a corporation under the laws of the State of Nevada. We
started offering the DISH® branded pay-TV service in March 1996 and are the nation’s third largest pay-TV
provider. Our common stock is publicly traded on the Nasdaq Global Select Market under the symbol “DISH.” Our
principal executive offices are located at 9601 South Meridian Boulevard, Englewood, Colorado 80112 and our
telephone number is [phone].
DISH Network Corporation is a holding company. Its subsidiaries (which together with DISH Network Corporation
are referred to as “DISH Network,” the “Company,” “we,” “us” and/or “our”) operate three primary business
segments.
x DISH. The DISH branded direct broadcast satellite (“DBS”) pay-TV service had 14.056 million
subscribers in the United States as of December 31, 2012. The DISH branded pay-TV service consists of
Federal Communications Commission (“FCC”) licenses authorizing us to use DBS and Fixed Satellite
Service (“FSS”) spectrum, our owned and leased satellites, receiver systems, third-party broadcast
operations, customer service facilities, a leased fiber network, in-home service and call center operations,
and certain other assets utilized in our operations. In addition, we market broadband services under the
dishNET™ brand.
x Blockbuster. On April 26, 2011, we completed the acquisition of most of the assets of Blockbuster, Inc.
(the “Blockbuster Acquisition”). The financial results of our Blockbuster operations are included in our
financial results beginning April 26, 2011. Blockbuster primarily offers movies and video games for sale
and rental through multiple distribution channels such as retail stores, by-mail, digital devices, the
blockbuster.com website and the BLOCKBUSTER On Demand® service.
x Wireless Spectrum. In 2008, we paid $712 million to acquire certain 700 MHz wireless spectrum licenses,
which were granted to us by the FCC in February 2009 subject to certain build-out requirements. On
March 9, 2012, we completed the acquisitions of 100% of the equity of reorganized DBSD North America,
Inc. (“DBSD North America”) and substantially all of the assets of TerreStar Networks, Inc. (“TerreStar”),
pursuant to which we acquired, among other things, 40 MHz of 2 GHz wireless spectrum licenses held by
DBSD North America and TerreStar. The financial results of DBSD North America and TerreStar are
included in our financial results beginning March 9, 2012. The total consideration to acquire these assets
was approximately $2.860 billion. This amount includes $1.364 billion for DBSD North America (the
“DBSD Transaction”), $1.382 billion for TerreStar (the “TerreStar Transaction”), and the net payment of
$114 million to Sprint Nextel Corporation (“Sprint”) pursuant to a settlement agreement. We are
evaluating our options to commercialize these assets.
Business Strategy
Our business strategy is to be the best provider of video services in the United States by providing high-quality
products, outstanding customer service, and great value. We promote DISH branded programming packages as
providing our subscribers with a better “price-to-value” relationship than those available from other subscription
television providers. We believe that there continues to be unsatisfied demand for high-quality, reasonably priced
television programming services.
x High-Quality Products. We offer a wide selection of local and national programming, featuring more
national and local HD channels than most pay-TV providers. We have been a technology leader in our
industry, introducing award-winning DVRs, dual tuner receivers, 1080p video on demand, and external
hard drives. To maintain and enhance our competitiveness over the long term, we introduced a new whole-
home HD DVR receiver, the Hopper™ set-top box, that allows, among other things, recorded programming