Dish Network 2013 Annual Report Download - page 25

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damages. Pursuant to STELA, our compliance with certain conditions of the waiver is subject to continued
oversight.
Cable Act and Program Access. We purchase a large percentage of our programming from cable-affiliated
programmers. Pursuant to the Cable Act of 1992 (“Cable Act”), cable providers had been prohibited from entering
into exclusive contracts with cable-affiliated programmers. The Cable Act directed that this prohibition expire after
a certain period of time unless the FCC determined that the prohibition continued to be necessary. On October 5,
2012, the FCC allowed this prohibition to expire. While the FCC has issued a Further Notice of Proposed
Rulemaking aimed at serving some of the same objectives as the prohibition, there can be no assurances that such
protections will be adopted or be as effective as the prohibition if they are adopted. In the event this decision is
reconsidered by the FCC or reviewed by a court of appeals, we cannot predict the timing or outcome of any
subsequent FCC decision.
As a result of the expiration of this prohibition on exclusivity, we may be limited in our ability to obtain access at
all, or on nondiscriminatory terms, to programming from programmers that are affiliated with cable system
operators. In addition, any other changes in the Cable Act, and/or the FCC’s rules that implement the Cable Act,
that currently limit the ability of cable-affiliated programmers to discriminate against competing businesses such as
ours, could adversely affect our ability to acquire cable-affiliated programming at all or to acquire programming on
non-discriminatory terms.
Furthermore, the FCC had imposed program access conditions on certain cable companies as a result of mergers,
consolidations or affiliations with programmers. The expiration of the exclusivity prohibition in the Cable Act
triggered the termination of certain program access conditions that the FCC had imposed on Liberty Media
Corporation (“Liberty”). In July 2012, similar program access conditions that had applied to Time-Warner Inc.
(“Time-Warner”) expired as previously scheduled. These developments may adversely affect our ability to obtain
Liberty’s and Time-Warner’s programming, or to obtain it on non-discriminatory terms. In the case of certain types
of programming affiliated with Comcast Corporation (“Comcast”) through its control of NBCUniversal Media, LLC
(“NBCUniversal”), the prohibition on exclusivity will still apply until January 2018. During that time, we have the
right to subject the terms of access to NBCUniversal’s programming to binding arbitration if we and the
programmer cannot reach agreement on terms, subject to FCC review. There can be no assurance that this
procedure will result in favorable terms for us or that the FCC conditions that establish this procedure will be
prevented from expiring on their own terms.
In addition, affiliates of certain cable providers have denied us access to sports programming they feed to their cable
systems terrestrially, rather than by satellite. The FCC has held that new denials of such service are unfair if they
have the purpose or effect of significantly hindering us from providing programming to consumers. However, we
cannot be sure that we can prevail in a complaint related to such programming and gain access to it. Our continuing
failure to access such programming could materially and adversely affect our ability to compete in regions serviced
by these cable providers.
MDU Exclusivity. The FCC has found that cable companies should not be permitted to have exclusive relationships
with multiple dwelling units (e.g., apartment buildings). In May 2009, the D.C. Circuit upheld the FCC’s decision.
While the FCC requested comments in November 2007 on whether DBS and Private Cable Operators should be
prohibited from having similar relationships with multiple dwelling units, it has yet to make a formal decision. If
the cable exclusivity ban were to be extended to DBS providers, our ability to serve these types of buildings and
communities would be adversely affected. We cannot predict the timing or outcome of the FCC’s consideration of
this proposal.
Net Neutrality. During 2010, the FCC imposed rules of nondiscrimination and transparency upon wireline
broadband providers. While this decision provides certain protection from discrimination by wireline broadband
providers against our distribution of video content via the Internet, it may still permit wireline broadband providers
to provide certain services over their wireline broadband network that are not subject to these requirements.
Although the FCC imposed similar transparency requirements on wireless broadband providers, which includes
AWS licensees, it declined to impose a wireless nondiscrimination rule. Instead, wireless broadband Internet
providers are prohibited from blocking websites and applications that compete with voice and video telephony
services. The FCC’s net neutrality rules were challenged in Federal court. On January 14, 2014, the D.C. Circuit