Dish Network 2014 Annual Report Download - page 113

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-7
1. Organization and Business Activities
Principal Business
DISH Network Corporation is a holding company. Its subsidiaries (which together with DISH Network
Corporation are referred to as “DISH Network,” the “Company,” “we,” “us” and/or “our,” unless otherwise
required by the context) operate two primary business segments.
 DISH. The DISH® branded pay-TV service (“DISH”) had 13.978 million subscribers in the United States as
of December 31, 2014. The DISH branded pay-TV service consists of, among other things, Federal
Communications Commission (“FCC”) licenses authorizing us to use direct broadcast satellite (“DBS”) and
Fixed Satellite Service (“FSS”) spectrum, our owned and leased satellites, receiver systems, third-party
broadcast operations, customer service facilities, a leased fiber optic network, in-home service and call center
operations, and certain other assets utilized in our operations. In addition, we market broadband services under
the dishNET™ brand, which had 0.577 million subscribers in the United States as of December 31, 2014. This
service utilizes advanced technology and high-powered satellites launched by Hughes Communications, Inc.
(“Hughes”) and ViaSat, Inc. (“ViaSat”) to provide broadband coverage nationwide. This service primarily
targets rural residents that are underserved, or unserved, by wireline broadband. In addition to the dishNET
branded satellite broadband service, we also offer wireline voice and broadband services under the dishNET
brand as a competitive local exchange carrier to consumers living in a 14-state region in the western United
States. We primarily bundle our dishNET branded services with our DISH branded pay-TV service.
 Wireless
o DISH Spectrum. We have invested over $5.0 billion since 2008 to acquire certain wireless spectrum
licenses and related assets. These wireless spectrum licenses are subject to certain interim and final
build-out requirements. As we review 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, as
well as the acquisition of additional wireless spectrum.
o AWS-3 Auction. On February 13, 2015, Northstar Wireless, LLC (“Northstar Wireless”) and SNR
Wireless LicenseCo, LLC (“SNR Wireless”) each filed applications with the Federal Communications
Commission (“FCC”) to acquire certain AWS-3 wireless spectrum licenses (the “AWS-3 Licenses”)
that were made available in the auction designated by the FCC as Auction 97 (the “AWS-3 Auction”)
for which it was named as winning bidder and had made the required down payments. Issuance of any
AWS-3 licenses to Northstar Wireless or SNR Wireless depends, among other things, upon the FCC’s
review and approval of the applications filed by Northstar Wireless and SNR Wireless. We cannot
predict the timing or the outcome of the FCC’s review of those applications. We own an 85% non-
controlling interest in each of Northstar Spectrum, LLC (“Northstar Spectrum”) and SNR Wireless
Holdco, LLC (“SNR Holdco”), the parent companies of Northstar Wireless and SNR Wireless,
respectively. After Northstar Wireless and SNR Wireless have made the final payments to the FCC
for the AWS-3 Licenses, our total non-controlling equity and debt investments in these entities and
their parent companies, respectively, will be approximately $9.778 billion. As of December 31, 2014,
Northstar Wireless and SNR Wireless had made aggregate refundable upfront payments to the FCC of
approximately $920 million for the AWS-3 Auction, at which time our total non-controlling equity
and debt investments in these entities and their parent companies, respectively, was approximately
$899 million. Under the applicable accounting guidance in Accounting Standards Codification 810,
Consolidation (“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