Dish Network 2015 Annual Report Download - page 51

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2015, the total equity contributions from American III and SNR Management to SNR HoldCo were approximately $524
million and $93 million, respectively. As of October 1, 2015, the total loans from American III to SNR Wireless under
the SNR Credit Agreement for payments to the FCC related to the SNR Licenses were approximately $3.847 billion.
After Northstar Wireless and SNR Wireless satisfied their respective payments to the FCC on October 1, 2015 for the
Northstar Licenses and the SNR Licenses, and the Northstar Interim Payment and the SNR Interim Payment (which
included an additional bid withdrawal payment), our total non-controlling debt and equity investments in the Northstar
Entities and the SNR Entities for payments to the FCC related to the AWS-3 Licenses were approximately $10.191
billion. Under the applicable accounting guidance in ASC 810, Northstar Spectrum and SNR HoldCo are considered
variable interest entities and, based on the characteristics of the structure of these entities and in accordance with the
applicable accounting guidance, we have consolidated these entities into our financial statements beginning in the fourth
quarter 2014. See Note 2 in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K for
further information.
On October 27, 2015, the FCC granted the Northstar Licenses to Northstar Wireless and the SNR Licenses to SNR
Wireless, respectively, which are recorded in “FCC authorizations” on our Consolidated Balance Sheets. The AWS-3
Licenses are subject to certain interim and final build-out requirements. By October 2021, Northstar Wireless and SNR
Wireless must provide reliable signal coverage and offer service to at least 40% of the population in each area covered
by an individual AWS-3 License (the “AWS-3 Interim Build-Out Requirement”). By October 2027, Northstar Wireless
and SNR Wireless must provide reliable signal coverage and offer service to at least 75% of the population in each area
covered by an individual AWS-3 License (the “AWS-3 Final Build-Out Requirement”). If Northstar Wireless or SNR
Wireless fails to meet the AWS-3 Interim Build-Out Requirement, the AWS-3 License term and the AWS-3 Final Build-
Out Requirement may be accelerated by two years (from October 2027 to October 2025) for each AWS-3 License area
in which it fails to meet the requirement. If Northstar Wireless or SNR Wireless fails to meet the AWS-3 Final Build-
Out Requirement, its authorization for each AWS-3 License area in which it fails to meet the requirement may terminate.
We may need to make significant additional loans to the Northstar Entities and to the SNR Entities, or they may need to
partner with others, so that the Northstar Entities and the SNR Entities may commercialize, build-out and integrate the
Northstar Licenses and the SNR Licenses, and comply with regulations applicable to the Northstar Licenses and the SNR
Licenses. Depending upon the nature and scope of such commercialization, build-out, integration efforts, and regulatory
compliance, any such loans or partnerships could vary significantly. We may need to raise significant additional capital
in the future, which may not be available on acceptable terms or at all, to make further investments in the Northstar
Entities and the SNR Entities. There can be no assurance that we will be able to obtain a profitable return on our non-
controlling investments in the Northstar Entities and the SNR Entities. See “We face certain risks related to our non-
controlling investments in the Northstar Entities and the SNR Entities, which may have a material adverse effect on our
business, results of operations and financial condition” below for more information.
Impairment of Assets
Furthermore, the fair values of wireless spectrum licenses and related assets may vary significantly in the future. In
particular, valuation swings could occur if:
x consolidation in the wireless industry allows or requires wireless carriers to sell significant portions of their
wireless spectrum holdings, which could in turn reduce the value of our spectrum holdings;
x a sale of spectrum by one or more wireless providers occurs;
x the FCC pursues certain policies designed to increase the number of wireless spectrum licenses available in
each of our markets; or
x the FCC conducts additional wireless spectrum auctions.
If the fair value of our wireless spectrum licenses were to decline significantly, the value of these licenses could be
subject to impairment charges. We assess potential impairments to our indefinite-lived intangible assets annually or
more often if indicators of impairment arise to determine whether there is evidence that indicate an impairment condition
may exist.