Dish Network 2015 Annual Report Download - page 46

36
We rely on key personnel and the loss of their services may negatively affect our business.
We believe that our future success will depend to a significant extent upon the performance of Charles W. Ergen, our
Chairman and Chief Executive Officer, 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. Mr. Ergen also serves as the Chairman of EchoStar. 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
We have made substantial investments to acquire certain wireless spectrum licenses and other related assets. In
addition, we have made substantial non-controlling investments in the Northstar Entities and the SNR Entities related
to AWS-3 wireless spectrum licenses.
DISH Network Spectrum
We have invested over $5.0 billion since 2008 to acquire certain wireless spectrum licenses and related assets.
700 MHz 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. On October 29, 2013, the FCC issued an order approving a voluntary industry solution
to resolve certain interoperability issues affecting the lower 700 MHz spectrum band (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 original interim and final build-out
requirements associated with our 700 MHz licenses so that by March 2017, 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, 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”). While the modifications to our 700 MHz licenses 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.
AWS-4 Licenses. On March 2, 2012, the FCC approved the transfer of 40 MHz of 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.
On February 15, 2013, the FCC issued an order, which became effective on March 7, 2013, modifying our licenses to
expand our terrestrial operating authority with AWS-4 authority. That order imposed certain limitations on the use of a
portion of this spectrum, including interference protections for other spectrum users and power and emission limits that
we presently believe could render 5 MHz of our uplink spectrum (2000-2005 MHz) effectively unusable for terrestrial
services and limit our ability to fully utilize the remaining 15 MHz of our uplink spectrum (2005-2020 MHz) for
terrestrial services. These limitations could, among other things, impact the ongoing development of technical standards
associated with our wireless business, and may have a material adverse effect on our ability to commercialize our AWS-
4 licenses. That order also mandated certain interim and final build-out requirements for the licenses. By March 2017,
we must provide terrestrial signal coverage and offer terrestrial service to at least 40% of the aggregate population