Dish Network 2015 Annual Report Download - page 47

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represented by all of the areas covered by the licenses (the “AWS-4 Interim Build-Out Requirement”). By March 2020,
we were required to provide terrestrial signal coverage and offer terrestrial service to at least 70% of the population in
each area covered by an individual license (the “AWS-4 Final Build-Out Requirement”).
On December 20, 2013, the FCC issued a further order that, among other things, extended the AWS-4 Final Build-Out
Requirement by one year to March 2021 (the “Modified AWS-4 Final Build-Out Requirement”). If we fail to meet the
AWS-4 Interim Build-Out Requirement, the Modified AWS-4 Final Build-Out Requirement may be accelerated by one
year, from March 2021 to March 2020. If we fail to meet the Modified AWS-4 Final Build-Out Requirement, our
terrestrial authorization for each license area in which we fail to meet the requirement may terminate. The FCC’s
December 20, 2013 order also conditionally waived certain FCC rules for our AWS-4 licenses to allow us to repurpose
all 20 MHz of our uplink spectrum (2000-2020 MHz) for downlink (the “AWS-4 Downlink Waiver”). If we fail to
notify the FCC that we intend to use our uplink spectrum for downlink by June 20, 2016, the AWS-4 Downlink Waiver
will terminate, and the Modified AWS-4 Final Build-Out Requirement will revert back to the AWS-4 Final Build-Out
Requirement.
H Block Licenses. On April 29, 2014, the FCC issued an order granting our application to acquire all 176 wireless
spectrum licenses in the H Block auction. We paid approximately $1.672 billion to acquire these H Block licenses,
including clearance costs associated with the lower H Block spectrum. The H Block licenses are subject to certain
interim and final build-out requirements. By April 2018, we must provide reliable signal coverage and offer service to at
least 40% of the population in each area covered by an individual H Block license (the “H Block Interim Build-Out
Requirement”). By April 2024, we must provide reliable signal coverage and offer service to at least 75% of the
population in each area covered by an individual H Block license (the “H Block Final Build-Out Requirement”). If we
fail to meet the H Block Interim Build-Out Requirement, the H Block license term and the H Block Final Build-Out
Requirement may be accelerated by two years (from April 2024 to April 2022) for each H Block license area in which
we fail to meet the requirement. If we fail to meet the H Block Final Build-Out Requirement, our authorization for each
H Block license area in which we fail to meet the requirement may terminate. The FCC has adopted rules for the
H Block spectrum band that is adjacent to our AWS-4 licenses. Depending on the outcome of the standard-setting
process for the H Block and our ultimate decision regarding the AWS-4 Downlink Waiver, the rules that the FCC
adopted for the H Block could further impact 15 MHz of our AWS-4 uplink spectrum (2005-2020 MHz), which may
have a material adverse effect on our ability to commercialize the AWS-4 licenses.
Commercialization of Our Wireless Spectrum Licenses and Related Assets. We have made substantial investments to
acquire certain wireless spectrum licenses and related assets. We will need to make significant additional investments or
partner with others to, among other things, commercialize, build-out, and integrate these licenses and related assets, and
any additional acquired licenses and related assets; and comply with regulations applicable to such licenses. Depending
on the nature and scope of such commercialization, build-out, integration efforts, and regulatory compliance, any such
investments or partnerships could vary significantly. We may also determine that additional wireless spectrum licenses
may be required to commercialize our wireless business and to compete with other wireless service providers. For
example, on February 10, 2016, we filed an application with the FCC to potentially participate as a bidder in the
upcoming Auction 1000. Auction 1000 is scheduled to begin on March 29, 2016. The FCC determined that bidding in
Auction 1000 will be “anonymous,” which means that prior to and during the course of the auction, the FCC will not
make public any information about a specific applicant’s upfront deposits or its bids. In addition, FCC rules restrict
information that bidders may disclose about their participation in Auction 1000. We may need to raise significant
additional capital in the future to fund the efforts described above, which may not be available on acceptable terms or at
all. There can be no assurance that we will be able to develop and implement a business model that will realize a return
on these wireless spectrum licenses or that we will be able to profitably deploy the assets represented by these wireless
spectrum licenses, which may affect the carrying amount of these assets and our future financial condition or results of
operations.