Dish Network 2015 Annual Report Download - page 88

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Programming Contracts
In the normal course of business, we enter into contracts to purchase programming content in which our payment
obligations are generally contingent on the number of Pay-TV subscribers to whom we provide the respective content.
These programming commitments are not included in the “Commitments” table above. The terms of our contracts
typically range from one to ten years with annual rate increases. Our programming expenses will continue to increase to
the extent we are successful in growing our Pay-TV subscriber base. In addition, programming costs continue to increase
due to contractual price increases and the renewal of long-term programming contracts on less favorable pricing terms.
Future Capital Requirements
We expect to fund our future working capital, capital expenditures and debt service requirements from cash generated
from operations, existing cash, cash equivalents and marketable investment securities balances, and cash generated
through raising additional capital. The amount of capital required to fund our future working capital and capital
expenditure needs varies, depending on, among other things, the rate at which we acquire new subscribers and the cost of
subscriber acquisition and retention, including capitalized costs associated with our new and existing subscriber
equipment lease programs. The majority of our capital expenditures for 2016, with the exception of the
commercialization of our existing wireless spectrum licenses and potential purchase of additional wireless spectrum
licenses discussed below, are expected to be driven by the costs associated with subscriber premises equipment and
capital expenditures for our satellite-related obligations. These expenditures are necessary to operate and maintain our
Pay-TV services. Consequently, we consider them to be non-discretionary. The amount of capital required will also
depend on the levels of investment necessary to support potential strategic initiatives that may arise from time to time.
Our capital expenditures vary depending on the number of satellites leased or under construction at any point in time,
and could increase materially as a result of increased competition, significant satellite failures, or economic weakness
and uncertainty. These factors could require that we raise additional capital in the future.
Volatility in the financial markets has made it more difficult at times for issuers of high-yield indebtedness, such as us, to
access capital markets at acceptable terms. These developments may have a significant effect on our cost of financing
and our liquidity position.
Wireless
DISH Network Spectrum. We have invested over $5.0 billion since 2008 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. In addition, as we consider our options for the commercialization of our wireless spectrum, we may
incur significant additional expenses and may have to make significant investments related to, among other things,
research and development, wireless testing and wireless network infrastructure. 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. See Note 15
“Commitments and Contingencies — Wireless — DISH Network Spectrum” in the Notes to our Consolidated Financial
Statements in this Annual Report on Form 10-K for further information.