Dish Network 2013 Annual Report Download - page 17

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impact the remaining 15 MHz of our uplink spectrum (2005-2020 MHz), which may have a material adverse effect
on our ability to commercialize the AWS-4 licenses.
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. At the time they were granted, these licenses were subject to certain interim and final
build-out requirements. By June 2013, we were required to provide signal coverage and offer service to at least 35%
of the geographic area in each area covered by each individual license (the “700 MHz Interim Build-Out
Requirement”). By June 2019, we were required to provide signal coverage and offer service to at least 70% of the
geographic area in each area covered by each individual license (the “700 MHz Final Build-Out Requirement”). As
discussed below, these requirements have since been modified by the FCC.
On September 9, 2013, we filed a letter with the FCC in support of a voluntary industry solution to resolve certain
interoperability issues affecting the lower 700 MHz spectrum band (the “Interoperability Solution”). On October
29, 2013, the FCC issued an order approving the Interoperability Solution (the “Interoperability Solution Order”),
which requires us to reduce power emissions on our 700 MHz licenses. As part of the Interoperability Solution
Order, the FCC, among other things, approved our request to modify the 700 MHz Interim Build-Out Requirement
so that by March 2017 (rather than the previous deadline of June 2013), we must provide signal coverage and offer
service to at least 40% of our total E Block population (the “Modified 700 MHz Interim Build-Out Requirement”).
The FCC also approved our request to modify the 700 MHz Final Build-Out Requirement so that by March 2021
(rather than the previous deadline of June 2019), we must provide signal coverage and offer service to at least 70%
of the population in each of our E Block license areas (the “Modified 700 MHz Final Build-Out Requirement”).
These requirements replaced the previous build-out requirements associated with our 700 MHz licenses. While the
modifications to our 700 MHz licenses would provide us additional time to complete the build-out requirements, the
reduction in power emissions could have an adverse impact on our ability to fully utilize our 700 MHz licenses. If
we fail to meet the Modified 700 MHz Interim Build-Out Requirement, the Modified 700 MHz Final Build-Out
Requirement may be accelerated by one year, from March 2021 to March 2020, and we could face the reduction of
license area(s). If we fail to meet the Modified 700 MHz Final Build-Out Requirement, our authorization may
terminate for the geographic portion of each license in which we are not providing service.
We will need to make significant additional investments or partner with others to, among other things, finance the
commercialization and build-out requirements of these licenses and our integration efforts, including compliance
with regulations applicable to the acquired licenses. Depending on the nature and scope of such commercialization,
build-out, and integration efforts, any such investment or partnership could vary significantly. There can be no
assurance that we will be able to develop and implement a business model that will realize a return on these
spectrum licenses or that we will be able to profitably deploy the assets represented by these spectrum licenses,
which may affect the carrying value of these assets and our future financial condition or results of operations.
New Business Opportunities
From time to time we evaluate opportunities for strategic investments or acquisitions that may complement our
current services and products, enhance our technical capabilities, improve or sustain our competitive position, or
otherwise offer growth opportunities.
Relationship with EchoStar
On January 1, 2008, we completed the distribution of our technology and set-top box business and certain
infrastructure assets (the “Spin-off”) into a separate publicly-traded company, EchoStar. DISH Network and
EchoStar operate as separate publicly-traded companies and, except for the Satellite and Tracking Stock Transaction
discussed below, neither entity has any ownership interest in the other. However, a substantial majority of the
voting power of the shares of both DISH Network and EchoStar is owned beneficially by Charles W. Ergen, our
Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family. EchoStar is our sole supplier
of digital set-top boxes and digital broadcast operations. In addition, EchoStar provides a majority of our
transponder capacity and is a key supplier of related services to us. See “Item 1A. Risk Factors” and Note 20 in the
Notes to our Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K for more
information.