Dish Network 2010 Annual Report Download - page 17

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FCC Actions Affecting our Licenses and Applications. A number of our other applications have been denied or
dismissed without prejudice by the FCC, or remain pending. We cannot be sure that the FCC will grant any of our
outstanding applications, or that the authorizations, if granted, will not be subject to onerous conditions. Moreover,
the cost of building, launching and insuring a satellite can be as much as $300 million or more. If we are unable to
construct and launch any of the satellites for which we have requested authorizations, it may result in further FCC
restrictions on our operations.
4.5 Degree Spacing Tweener Satellites. The FCC has proposed to allow so-called “tweener” DBS operations –
DBS satellites operating from orbital locations 4.5 degrees (half of the usual nine degrees) away from other DBS
satellites. The FCC has already granted authorizations to Spectrum Five and EchoStar for tweener satellites at the
114.5 and 86.5 degree orbital locations, respectively. Certain tweener operations, as proposed, could cause harmful
interference into our service and constrain our future operations. The FCC has not completed its rulemaking on the
operating and service rules for tweener satellites.
Interference from Other Services Sharing Satellite Spectrum. The FCC has adopted rules that allow non-
geostationary orbit fixed satellite services to operate on a co-primary basis in the same frequency band as DBS and
Ku-band-based fixed satellite services. The FCC has also authorized the use of MVDDS in the DBS band.
MVDDS licenses were auctioned in 2004. Despite regulatory provisions to protect DBS operations from harmful
interference, there can be no assurance that operations by other satellites or terrestrial communication services in the
DBS band will not interfere with our DBS operations and adversely affect our business.
International Satellite Competition and Interference. DirecTV and Spectrum Five have obtained FCC authority to
provide service to the United States from a Canadian DBS orbital slot, and EchoStar has obtained authority to
provide service to the United States from both a Mexican and a Canadian DBS orbital slot. Further, we have also
received authority to do the same from a Canadian DBS orbital slot at 129 degrees and a Canadian FSS orbital slot
at 118.7 degrees. The possibility that the FCC will allow service to the U.S. from additional foreign slots may
permit additional competition against us from other satellite providers. It may also provide a means by which to
increase our available satellite capacity in the United States. In addition, a number of administrations, such as Great
Britain and the Netherlands, have requested to add orbital locations serving the U.S. close to our licensed slots.
Such operations could cause harmful interference to our satellites and constrain our future operations.
Rules Relating to Broadcast Services. The FCC imposes different rules for “subscription” and “broadcast”
services. We believe that because we offer a subscription programming service, we are not subject to many of the
regulatory obligations imposed upon broadcast licensees. However, we cannot be certain whether the FCC will find
in the future that we must comply with regulatory obligations as a broadcast licensee, and certain parties have
requested that we be treated as a broadcaster. If the FCC determines that we are a broadcast licensee, it could
require us to comply with all regulatory obligations imposed upon broadcast licensees, which in certain respects are
subject to more burdensome regulation than subscription television service providers.
Public Interest Requirements. The FCC imposes certain public interest obligations on our DBS licenses. These
obligations require us to set aside four percent of our channel capacity exclusively for noncommercial programming
for which we must charge programmers below-cost rates and for which we may not impose additional charges on
subscribers. The Satellite Television Extension and Localism Act of 2010 (“STELA”) requires the FCC to decrease
this set-aside to 3.5 percent for satellite carriers who provide retransmission of state public affairs networks in 15
states and are otherwise qualified. The FCC, however, has not yet determined whether we qualify for this decrease
in set-aside. The obligation to provide noncommercial programming may displace programming for which we
could earn commercial rates and could adversely affect our financial results. We cannot be sure that, if the FCC
were to review our methodology for processing public interest carriage requests, computing the channel capacity we
must set aside or determining the rates that we charge public interest programmers, it would find them in compliance
with the public interest requirements.
Separate Security, Plug and Play. Cable companies are required by law to separate the security from the other
functionality of their set-top boxes. Set-top boxes used by DBS providers are not currently subject to such separate
security requirement. However, the FCC is considering a possible expansion of that requirement to DBS set-top
boxes. Also, the FCC has adopted the so-called “plug and play” standard for compatibility between digital
television sets and cable systems. That standard was developed through negotiations involving the cable and