Dish Network 2015 Annual Report Download - page 118

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-14
The DBS FCC licenses were assessed quantitatively in 2014 and 2013. Our quantitative assessments consisted of a
discounted cash flow analysis encompassing future cash flows from satellites transmitting from such licensed orbital
locations, including revenue attributable to programming offerings from such satellites, the direct operating and
subscriber acquisition costs related to such programming, and future capital costs for replacement
satellites. Projected revenue and cost amounts included projected subscribers. In conducting our annual impairment
test in 2014 and 2013, we determined that the fair value of the DBS FCC licenses exceeded its carrying amount.
Wireless Spectrum Licenses. We combine our AWS-4 and H Block wireless spectrum licenses and the Northstar
Licenses and SNR Licenses into a single unit of accounting. For 2015, management performed a qualitative
assessment to determine whether it is more likely than not that the fair value of these licenses exceeds the carrying
amount of these licenses. In our assessment, we considered several qualitative factors, including, among others,
macroeconomic conditions, industry and market conditions, relevant company specific events, and perception of the
market. In contemplating all factors in their totality, we concluded that it is more likely than not that the fair value
of these licenses exceeds the carrying amount of these licenses. As such, no further analysis was required.
The AWS-4 and H Block wireless spectrum licenses were assessed quantitatively in 2014 and 2013. Our
quantitative assessment consisted of an income approach and a market approach. The income approach consisted of
a probability weighted analysis considering estimated future cash flows discounted at a rate commensurate with the
risk involved. The market approach benchmarked the fair value of the AWS-4 and H-Block wireless spectrum
licenses against the carrying amount of these licenses. In conducting our annual impairment test in 2014 and 2013,
we determined that the fair value of the AWS-4 and H Block wireless spectrum licenses exceeded the carrying
amount of these licenses.
Our 700 MHz wireless spectrum licenses are assessed as a single unit of accounting. For 2015, management
performed a qualitative assessment to determine whether it is more likely than not that the fair value of the 700 MHz
wireless spectrum licenses exceeds its carrying amount. In our assessment, we considered several qualitative
factors, including, among others, macroeconomic conditions, industry and market conditions, relevant company
specific events, and perception of the market. In contemplating all factors in their totality, we concluded that it is
more likely than not that the fair value of these licenses exceeds its carrying amount. As such, no further analysis
was required.
The 700 MHz wireless spectrum licenses were assessed quantitatively in 2014 and 2013, in which the estimated fair
value for the 700 MHz licenses was determined using the market approach. The market approach benchmarks the
fair value of the 700 MHz licenses against its carrying amount. In conducting our annual impairment test in 2014
and 2013, we determined that the fair value of the 700 MHz wireless spectrum licenses exceeded its carrying
amount.
Changes in circumstances or market conditions could result in a write-down of any of the above wireless spectrum
licenses in the future.
Capitalized Interest
We capitalize interest associated with the acquisition or construction of certain assets, including, among other
things, satellites and wireless spectrum licenses. Capitalization of interest begins when, among other things, steps
are taken to prepare the asset for its intended use and ceases when the asset is ready for its intended use or when
these activities are substantially suspended.
We are currently preparing for the commercialization of our AWS-4 and H Block wireless spectrum licenses, and
interest expense related to their carrying amount is being capitalized. In addition, on October 27, 2015, the FCC
granted certain AWS-3 Licenses to Northstar Wireless and to SNR Wireless, respectively, in which we have made
certain non-controlling investments. Northstar Wireless and SNR Wireless are preparing for the commercialization
of their AWS-3 Licenses, and began capitalizing interest related to these AWS-3 Licenses as of October 27, 2015.
Also during fourth quarter 2015, the Third Generation Partnership Project (“3GPP”) approved Band 66 and
completed a feasibility study for another band of spectrum. Band 66 includes DISH Network’s current AWS-4