Dish Network 2015 Annual Report Download - page 22

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Interference from Other Services Sharing Satellite Spectrum. The FCC has adopted rules that allow non-geostationary
orbit fixed satellite services to operate on a co-primary basis in the same frequency band as DBS and FSS. The FCC has
also authorized the use of multichannel video distribution and data service (“MVDDS”) licenses in the DBS band.
MVDDS licenses were auctioned in 2004. MVDDS systems are now only beginning to be commercially deployed in a
few markets. We have MVDDS licenses in 82 out of 214 geographical license areas. Despite regulatory provisions
intended to protect DBS and FSS operations from harmful interference, there can be no assurance that operations by
other satellites or terrestrial communication services in the DBS and FSS bands will not interfere with our DBS and FSS
operations and adversely affect our business.
Satellite Competition from Additional Slots and Interference. DirecTV has obtained FCC authority to provide service
to the United States from a Canadian DBS orbital slot, and EchoStar has obtained authority to provide service to the
United States from both a Mexican and a Canadian DBS orbital slot. Further, we have also received authority to do the
same from a Canadian DBS orbital slot at 129 degrees and a Canadian FSS orbital slot at 118.7 degrees. The possibility
that the FCC will allow service to the U.S. from additional foreign slots may permit additional competition against us
from other satellite providers. It may also provide a means by which to increase our available satellite capacity in the
United States. In addition, a number of administrations, such as Great Britain and the Netherlands, have requested
authority to add orbital locations serving the U.S. close to our licensed slots. Such operations could cause harmful
interference to our satellites and constrain our future operations.
Rules Relating to Broadcast Services. The FCC imposes different rules for “subscription” and “broadcast” services.
We believe that because we offer a subscription programming service, we are not subject to many of the regulatory
obligations imposed upon broadcast licensees. However, we cannot be certain whether the FCC will find in the future
that we must comply with regulatory obligations as a broadcast licensee, and certain parties have requested that we be
treated as a broadcaster. If the FCC determines that we are a broadcast licensee, it could require us to comply with all
regulatory obligations imposed upon broadcast licensees, which in certain respects are subject to more burdensome
regulation than subscription television service providers.
Public Interest Requirements. The FCC imposes certain public interest obligations on our DBS licenses. These
obligations require us to set aside four percent of our channel capacity exclusively for noncommercial programming for
which we must charge programmers below-cost rates and for which we may not impose additional charges on
subscribers. The Satellite Television Extension and Localism Act of 2010 (“STELA”) required the FCC to decrease this
set-aside to 3.5 percent for satellite carriers who provide retransmission of state public affairs networks in 15 states and
are otherwise qualified. The FCC, however, has not yet determined whether we qualify for this decrease in set-aside.
The obligation to provide noncommercial programming may displace programming for which we could earn commercial
rates and could adversely affect our financial results. We cannot be sure that, if the FCC were to review our
methodology for processing public interest carriage requests, computing the channel capacity we must set aside or
determining the rates that we charge public interest programmers, it would find them in compliance with the public
interest requirements.
Separate Security, Plug and Play. The STELA Reauthorization Act of 2014 (“STELAR”) ended the “integration ban”
that required cable companies to separate security functionality from the other features of their set-top boxes and that
required leased cable set-top boxes to include CableCARDs. The repeal of the integration ban became effective in
December 2015. Set-top boxes used by DBS providers were not subject to this separate security requirement. STELAR
required the FCC to establish a working group of technical experts to identify and report on downloadable security
design options that are not unduly burdensome and that promote competition with respect to the availability of
navigation devices. The working group released a report in August 2015, which declined to offer a consensus
recommendation regarding downloadable security design options. However, we cannot predict whether the FCC will
take further action regarding downloadable security. Also, the FCC adopted the so-called “plug and play” standard for
compatibility between digital television sets and cable systems. That standard was developed through negotiations
involving the cable and consumer electronics industries, but not the satellite television industry. The FCC’s adoption of
the standard was accompanied by certain rules regarding copy protection measures that were applicable to us. We
appealed the FCC’s decision regarding the copy protection measures to the U.S. Court of Appeals for the D.C. Circuit
(“D.C. Circuit”) and on January 15, 2013 the D.C. Circuit vacated the FCC’s decision. The FCC is also considering
various proposals to establish two-way digital cable “plug and play” rules. That proceeding also asks about means to