Dish Network 2008 Annual Report Download - page 12

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Receiver Systems. Our subscribers receive programming via in-home equipment that includes a small satellite dish,
digital set-top receivers, and remote controls. Some of our advanced receiver models feature DVRs, HD capability,
and dual-tuners which allow independent viewing on two separate televisions. Our newest receiver models are
Internet-protocol compatible which allows consumers to view movies and other content on their televisions via the
Internet and a broadband connection. As a result of the Spin-off, we rely on EchoStar to design and manufacture all
of our new receivers and certain related components. See “Item 1A – Risk Factors.”
Content Delivery
Digital Broadcast Operations Centers. The principal digital broadcast operations centers we use are EchoStar’s
facilities located in Cheyenne, Wyoming and Gilbert, Arizona. We also use six regional digital broadcast operations
centers owned and operated by EchoStar that allow us to maximize the use of the spot beam capabilities of certain
owned and leased satellites. Programming content is received at these centers by fiber or satellite and processed,
compressed, encrypted and then uplinked to satellites for delivery to consumers.
In connection with the Spin-off, we entered into an agreement pursuant to which EchoStar provides broadcast
services including teleport services such as transmission and downlinking, channel origination services, and channel
management services to us thereby enabling us to deliver satellite television programming to subscribers. The
broadcast agreement expires on December 31, 2009; however, we have the right, but not the obligation, to extend
the agreement annually for successive one-year periods for up to two additional years. We may terminate channel
origination services and channel management services for any reason and without any liability upon sixty days
written notice. However, if we terminate teleport services for a reason other than EchoStar’s breach, we will need to
pay EchoStar an amount equal to the balance of the expected cost of providing such teleport services. The fees for
the services provided under the broadcast agreement are equal to EchoStar’s cost plus a fixed margin, which varies
depending on the nature of the services provided.
Satellites. Our DISH Network programming is currently delivered to customers using satellites that operate in the
“Ku” band portion of the microwave radio spectrum. The Ku-band is divided into two spectrum segments. The
portion of the Ku-band that allows the use of higher power satellites  12.2 to 12.7 GHz over the United States  is
known as the Broadcast Satellite Service (“BSS”) band, which is also referred to as the Direct Broadcast Satellite
(“DBS”) band. The portion of the Ku-band that requires lower power satellites  11.7 to 12.2 GHz over the United
States  is known as the Fixed Satellite Service (“FSS”) band.
Most of our programming is currently delivered using DBS satellites. To accommodate the more bandwidth-
intensive HD programming and other needs, we continue to explore opportunities to expand our satellite capacity
through the acquisition of new spectrum, the launching of more technologically advanced satellites, and the more
efficient use of existing spectrum via, among other things, better modulation and compression technologies.
We own or lease capacity on 14 satellites in geostationary orbit approximately 22,300 miles above the equator. For
further information concerning these satellites and satellite anomalies, please see the table and discussion under
“Satellites” below.
Conditional Access System. Our conditional access system secures our programming content using encryption so
that only paying customers can access our programming. We use microchips embedded in credit card-sized access
cards, called “smart cards,” or in security chips in the satellite receiver, together referred to as “security access
devices,” to limit access to programming content.
Our signal encryption has been compromised in the past and may be compromised in the future even though we
continue to respond with significant investment in security measures, such as security access device replacement
programs and updates in security software, that are intended to make signal theft more difficult. It has been our
prior experience that security measures may be only effective for short periods of time or not at all and that we
remain susceptible to additional signal theft. We cannot assure you that we will be successful in reducing or
controlling theft of our programming content. During the third quarter of 2008, we began implementing a plan to
replace our existing security access devices to re-secure our system, which is expected to take approximately nine to
twelve months to complete. We cannot assure you that we will be successful in reducing or controlling theft of our