Dish Network 2013 Annual Report Download - page 42

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undertaken by us for certain of EchoStar’s businesses. We have also entered into certain commercial
agreements with EchoStar pursuant to which EchoStar, among other things, sells set-top boxes and related
equipment to us at specified prices. The terms of certain of these agreements were established while
EchoStar was a wholly-owned subsidiary of us and were not the result of arm’s length negotiations. The
allocation of assets, liabilities, rights, indemnifications and other obligations between EchoStar and us
under the separation and other intercompany agreements we entered into with EchoStar, in connection with
the Spin-off, may have been different if agreed to by two unaffiliated parties. Had these agreements been
negotiated with unaffiliated third parties, their terms may have been more favorable, or less favorable, to
us. In addition, conflicts could arise between us and EchoStar in the interpretation or any extension or
renegotiation of these existing agreements.
x Additional intercompany transactions. EchoStar or its affiliates have and will continue to enter into
transactions with us or our subsidiaries or other affiliates. Although the terms of any such transactions will
be established based upon negotiations between EchoStar and us and, when appropriate, subject to the
approval of a committee of the non-interlocking directors or in certain instances non-interlocking
management, there can be no assurance that the terms of any such transactions will be as favorable to us or
our subsidiaries or affiliates as may otherwise be obtained between unaffiliated parties.
x Business opportunities. We have historically retained, and in the future may acquire, interests in various
companies that have subsidiaries or controlled affiliates that own or operate domestic or foreign services
that may compete with services offered by EchoStar. We may also compete with EchoStar when we
participate in auctions for spectrum or orbital slots for our satellites. In addition, EchoStar may in the
future use its satellites, uplink and transmission assets to compete directly against us in the subscription
television business.
We may not be able to resolve any potential conflicts, and, even if we do so, the resolution may be less favorable to
us than if we were dealing with an unaffiliated party.
Other than certain joint arrangements between DISH Network and EchoStar, we do not have agreements with
EchoStar that would prevent either company from competing with the other.
We rely on key personnel and the loss of their services may negatively affect our businesses.
We believe that our future success will depend to a significant extent upon the performance of Charles W. Ergen,
our Chairman, and certain other executives. The loss of Mr. Ergen or of certain other key executives could have a
material adverse effect on our business, financial condition and results of operations. Although all of our executives
have executed agreements limiting their ability to work for or consult with competitors if they leave us, we do not
have employment agreements with any of them. To the extent our officers are performing services for EchoStar,
this may divert their time and attention away from our business and may therefore adversely affect our business.
Acquisition and Capital Structure Risks Affecting our Business
We made a substantial investment to acquire certain AWS-4 wireless spectrum licenses and other assets from
DBSD North America and TerreStar and to acquire certain 700 MHz wireless spectrum licenses. We will need to
make significant additional investments or partner with others to commercialize these licenses and assets.
On March 2, 2012, the FCC approved the transfer of 40 MHz of AWS-4 wireless spectrum licenses held by DBSD
North America and TerreStar to us. On March 9, 2012, we completed the DBSD Transaction and the TerreStar
Transaction, pursuant to which we acquired, among other things, certain satellite assets and wireless spectrum
licenses held by DBSD North America and TerreStar. The total consideration to acquire the DBSD North America
and TerreStar assets was approximately $2.860 billion.
Our consolidated FCC applications for approval of the license transfers from DBSD North America and TerreStar
were accompanied by requests for waiver of the FCC’s MSS “integrated service” and spare satellite requirements
and various technical provisions. On March 21, 2012, the FCC released a Notice of Proposed Rule Making
proposing the elimination of the integrated service, spare satellite and various technical requirements associated with
the AWS-4 licenses. On December 11, 2012, the FCC approved rules that eliminated these requirements and gave