Dish Network 2014 Annual Report Download - page 42

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material adverse effect on our business, financial condition and results of operations, including, among other things,
our gross new subscriber activations, net subscriber additions and subscriber churn rate.
We may not be able to obtain necessary retransmission consent agreements at acceptable rates, or at all, from
local network stations.
The Copyright Act generally gives satellite companies a statutory copyright license to retransmit local broadcast
channels by satellite back into the market from which they originated, subject to obtaining the retransmission
consent of local network stations that do not elect “must carry” status, as required by the Communications Act. If
we fail to reach retransmission consent agreements with such broadcasters, we cannot carry their signals. This could
have an adverse effect on our strategy to compete with cable and other satellite companies that provide local signals.
While we have been able to reach retransmission consent agreements with most of these local network stations, from
time to time there are stations with which we have not been able to reach an agreement. We cannot be sure that we
will secure these agreements or that we will secure new agreements on acceptable terms, or at all, upon the
expiration of our current retransmission consent agreements, some of which are short-term. We currently have
pending lawsuits with two major broadcast television networks alleging, among other things, that the PrimeTime
Anytime™ and AutoHop™ features of the Hopper set-top box breach their retransmission consent agreements. See
Note 16 in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K for further
information. In the event a court ultimately determines that we breached the terms of these retransmission consent
agreements, we may be subject, among other things, to substantial damages and we may lose access to programming
or may not be able to renew certain of our retransmission consent agreements and other programming agreements on
favorable terms or at all. Even if we ultimately prevail in these actions, there can be no assurance that we will be
able to renew our retransmission consent agreements or enter into new agreements with these broadcast networks.
In such event, there can be no assurance that we will be able to obtain substitute programming, or that such
substitute programming would be comparable in quality or cost to our existing programming. In recent years,
national broadcasters have used their ownership of certain local broadcast stations to require us to carry additional
cable programming in exchange for retransmission consent of their local broadcast stations. These requirements
may place constraints on available capacity on our satellites for other programming. Furthermore, the rates we are
charged for retransmitting local channels have been increasing substantially and may exceed our ability to increase
our prices to our customers. We may be unable to pass these increased programming costs on to our customers,
which could have a material adverse effect on our business, financial condition and results of operations.
We may be required to make substantial additional investments to maintain competitive programming offerings.
We believe that the availability and extent of HD programming and other value-added services such as access to
video via smartphones and tablets continue to be significant factors in consumers’ choice among pay-TV providers.
Other pay-TV providers may have more successfully marketed and promoted their HD programming packages and
value-added services and may also be better equipped and have greater resources to increase their HD offerings and
value-added services to respond to increasing consumer demand. In addition, even though it remains a small portion
of the market, consumer demand for 3D televisions and programming, as well as higher resolution programming,
such as 4K HD, will likely increase in the future. We may be required to make substantial additional investments in
infrastructure to respond to competitive pressure to deliver enhanced programming, and other value-added services,
and there can be no assurance that we will be able to compete effectively with offerings from other pay-TV
providers.
Any failure or inadequacy of our information technology infrastructure and communications systems could
disrupt or harm our business.
The capacity, reliability and security of our information technology hardware and software infrastructure (including
our billing systems) and communications systems are important to the operation of our current business, which
would suffer in the event of system failures or cyber attacks. Likewise, our ability to expand and update our
information technology infrastructure in response to our growth and changing needs is important to the continued
implementation of our new service offering initiatives. Our inability to expand or upgrade our technology
infrastructure could have adverse consequences, which could include, among other things, the delayed
implementation of new service offerings, service or billing interruptions, and the diversion of development
resources. For example, during 2012, we implemented a new billing system as well as new sales and customer care