Dish Network 2009 Annual Report Download - page 37

27
Our owned and leased satellites in orbit are subject to significant operational and environmental risks that could
limit our ability to utilize these satellites.
Satellites are subject to significant operational risks while in orbit. These risks include malfunctions, commonly
referred to as anomalies, that have occurred in our satellites and the satellites of other operators as a result of various
factors, such as satellite manufacturers’ errors, problems with the power systems or control systems of the satellites
and general failures resulting from operating satellites in the harsh environment of space.
Although we work closely with the satellite manufacturers to determine and eliminate the cause of anomalies in new
satellites and provide for redundancies of many critical components in the satellites, we may experience anomalies
in the future, whether of the types described above or arising from the failure of other systems or components.
Any single anomaly or series of anomalies could materially and adversely affect our operations and revenues and
our relationship with current customers, as well as our ability to attract new customers for our multi-channel video
services. In particular, future anomalies may result in the loss of individual transponders on a satellite, a group of
transponders on that satellite or the entire satellite, depending on the nature of the anomaly. Anomalies may also
reduce the expected useful life of a satellite, thereby reducing the channels that could be offered using that satellite,
or create additional expenses due to the need to provide replacement or back-up satellites. You should review the
disclosures relating to satellite anomalies set forth under Note 7 in the Notes to the Consolidated Financial
Statements in Item 15 of this Annual Report on Form 10-K.
Meteoroid events pose a potential threat to all in-orbit satellites. The probability that meteoroids will damage those
satellites increases significantly when the Earth passes through the particulate stream left behind by comets.
Occasionally, increased solar activity also poses a potential threat to all in-orbit satellites.
Some decommissioned spacecraft are in uncontrolled orbits which pass through the geostationary belt at various
points, and present hazards to operational spacecraft, including our satellites. We may be required to perform
maneuvers to avoid collisions and these maneuvers may prove unsuccessful or could reduce the useful life of the
satellite through the expenditure of fuel to perform these maneuvers. The loss, damage or destruction of any of our
satellites as a result of an electrostatic storm, collision with space debris, malfunction or other event could have a
material adverse effect on our business, financial condition and results of operations.
Our owned and leased satellites have minimum design lives ranging from 12 to 15 years, but could fail or suffer
reduced capacity before then.
Our ability to earn revenue depends on the usefulness of our satellites, each of which has a limited useful life. A
number of factors affect the useful lives of the satellites, including, among other things, the quality of their
construction, the durability of their component parts, the ability to continue to maintain proper orbit and control over
the satellite’s functions, the efficiency of the launch vehicle used, and the remaining on-board fuel following orbit
insertion. Generally, the minimum design life of each of our satellites ranges from 12 to 15 years. We can provide
no assurance, however, as to the actual useful lives of the satellites. Our operating results could be adversely
affected if the useful life of any of our satellites were significantly shorter than 12 years from the launch date.
In the event of a failure or loss of any of our satellites, we may need to acquire or lease additional satellite capacity
or relocate one of our other satellites and use it as a replacement for the failed or lost satellite, any of which could
have a material adverse effect on our business, financial condition and results of operations. A relocation would
require FCC approval and, among other things, a showing to the FCC that the replacement satellite would not cause
additional interference compared to the failed or lost satellite. We cannot be certain that we could obtain such FCC
approval. If we choose to use a satellite in this manner, this use could adversely affect our ability to meet the
operation deadlines associated with our authorizations. Failure to meet those deadlines could result in the loss of
such authorizations, which would have an adverse effect on our ability to generate revenues.