Jason Kiser - Treasurer Charles W. Ergen - Co-Founder and Chairman Thomas A. Cullen - Executive Vice President of Sales, Marketing and Programming Robert E. Olson - Chief Financial Officer, Principal Accounting Officer and Executive Vice President Joseph P. Clayton - Chief Executive Officer, President and Director R. Stanton Dodge - Executive Vice President, General Counsel and Secretary Bernard L. Han - Chief Operating Officer and Executive Vice President

Tuna N. Amobi - S&P Equity Research Benjamin Swinburne - Morgan Stanley, Research Division Stefan Anninger - Crédit Suisse AG, Research Division Jeffrey Duncan Wlodarczak - Pivotal Research Group LLC Vijay A. Jayant - ISI Group Inc., Research Division Douglas D. Mitchelson - Deutsche Bank AG, Research Division Jason B. Bazinet - Citigroup Inc, Research Division Marci Ryvicker - Wells Fargo Securities, LLC, Research Division Craig Moffett - Sanford C. Bernstein & Co., LLC., Research Division

Good afternoon. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the DISH Network Corporation Third Quarter Earnings Conference Call. [Operator Instructions] Thank you. Jason Kiser, Treasurer, you may begin your conference.

Thanks, Stephanie. Thanks for joining us. I'm joined today by Charlie Ergen, our Chairman; Joe Clayton, our CEO; Tom Cullen, Executive Vice President; Bernie Han, COO; Robert Olson, CFO; Paul Orban, our Controller; and Stanton Dodge, our General Counsel. Before we go to our opening remarks we do need to do some Safe Harbor disclosure. So for that, we will turn it over to Stan. R. Stanton Dodge: Thanks, Jason, and good morning, everyone, and thank you for joining us. We invited media to participate in a listen-only mode on the call and ask that you do not identify participants or their firms in your reports. We also do not allow audio taping and ask that you respect that. All statements we make during this call that are not statements of historical fact constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results, from any future results expressed or implied by such forward-looking statements. For a list of those factors, please refer to the file of our 10-Q. All cautionary statements that we make during this call should be understood as being applicable to any forward-looking statements we make wherever they appear. You should carefully consider the risks described in our reports and should not place undue reliance on any forward-looking statements. We assume no responsibility for updating any forward-looking statements. With that out of the way, I'll turn it back over to Jason.

Thanks, Stan. I think Joe actually has some opening remarks that he would like to do. Joseph P. Clayton: Thanks, Jason, and good morning to those of you on the West Coast, and good afternoon to our East Coast listeners. Now I started back on June 20, so the end of the third quarter really represents my first 100 days with DISH. I had ownership of this quarter's performance so I get to take the credit for the good and the bad on today's call. First, I'll review the significant modifications and accomplishments plus the areas that will require additional improvement. These include organizational changes, net activations, churn, financial metrics, customer service and marketing communication. But first, let me address our corporate projects. As you are aware, we have submitted our license transfer applications to the FCC for TerreStar and DBSD. The formal comment cycle ended last Thursday, November 3. We will now work with the Commission to move to closure. Needless to say, these acquisitions are a necessary step in the development of our wireless strategy. In the meantime, we continue to explore our technology and deployment options. I would be speculating to say anything more regarding wireless at this juncture. On the Blockbuster front, we are still in the process of evaluating our acquired assets by mail, DVDs and games, streaming capabilities, store locations and their operating metrics and, of course, the power of the brand itself. On the physical distribution front, we have seen good improvement, input traffic and transaction growth at most stores. And we are encouraged with customer enrollments and new promotional offerings. For example, the Blockbuster combo pass, which provides unlimited in-store exchanges along with our by-mail service, has attracted over 600,000 customers in its first few months. On the content front, some studios are evolving their economic and dwindling months, which creates some challenges. However, we're working with them while developing other sourcing options. It is disappointing that some studios appear to be less than enthusiastic about this channel of distribution and its promotional capabilities. Nevertheless, we will continue to evaluate the performance of each store location individually. We remain committed to maintaining only those stores that we believe will operate profitably. On the marketing front, we are testing different sales approaches to capitalize on the Blockbuster acquisition. For example, we're currently selling DISH services in 150 Blockbuster stores across America. And just last month, we launched our first nationally coordinated and advertised Blockbuster-DISH marketing initiative, the Blockbuster Movie Pass. This consumer offer for new and existing DISH subscribers includes one year of DVDs and video games by mail, over 20 live movie and entertainment channels and, in addition to streaming of thousands of movies and TV shows to both your TV and PC, all included with the 2-year subscription to DISH. October results are encouraging and I believe that this marketing promotion can be the primary catalyst for positive subscriber growth in the fourth quarter. And more importantly, it's a consumer service that no other pay-TV provider can offer. As an added benefit, we believe that the DISH-Blockbuster cross-marketing and advertising efforts are giving both brands a positive lift in the minds of the buying public. Now let's move on to the highlights of our third quarter. In terms of the DISH organization structure, all aspects of the company had been realigned for greater clarity, synergy and responsibility. Now the function that needs further adjustment and improvement is our marketing. I saved this for last because it needed the most work, and this is where I have the greatest expertise and experience base. We will continue to add more resources in order to expand and better focus our communication efforts. Now during the third quarter, we were up against an uncertain economic environment, flat household formations and a price-driven competitive landscape: heavy, free Sunday ticket advertising and aggressive discounting by DirecTV, video giveaways by the telcos to help broadband sales and aggressive cable promotions. We lost 111,000 subscribers. While definitely disappointing, the rate of attrition is slowing and we are starting to regain some sales momentum. Remember, we lost 135,000 subs in the second quarter. But if we look at our sales results on a bi-month basis, we bottomed out in the June-July time period, with improvements beginning in late August and September. So we are cautiously optimistic about our fourth quarter prospects, given the product and promotional programs that we have in place and the better seasonal sales in the fourth quarter. Moving on, industry churn is seasonally higher in the third quarter of the year and so it was for us. We came in very close to our historical levels at 1.83%. Now Robert Olson is going to take you through our performance metrics a little later but let me give you a couple of the highlights. From a financial viewpoint, net income on player and cash flow was strong at nearly $542 million. I believe that this reflects a balanced management approach to the entire DISH enterprise. Also on our third quarter press release, we announced a $2-per-share nonrecurring dividend to our shareholders of record as of November 17. This will be payable in cash on December 1. Our ARPU, at $77, was slightly off. We must do a better job at selling our pay-per-view premium channels and higher-margin programming packages, and plans are in place to do just that. The Blockbuster Movie Pass is a good example. Progress continues on our customer service metrics as witnessed by our most recent J.D. Power's report, modest improvement but improvement, nonetheless. This is simply about always putting the customer first and getting it right the first time. Now given the short period that I've been CEO, we have been somewhat limited in the product and promotion modifications that we could make. The first 100 days had been focused on short-term tactics. The results show it. As we enter into the fourth quarter, we had a little more time to put some strategic elements in place. You can see this in our Blockbuster Movie Pass promotional and marketing efforts. And it has been a long time since DISH has run national brand-building advertising, but we are in the marketplace now with an aggressive communication plan. As we roll into 2012, we will have more time to strategically plan our product, promotional offers and advertising message. Now to give you some additional insight into our third quarter financial performance, here's our CFO, Robert Olson. Robert E. Olson: Thank you. As Joe described, we have launched the rebuilding of our sales and marketing focus. We still have a lot of work ahead of us, so expect gradual rather than immediate improvement. Clearly, our new activation results in the third quarter were lower than we wanted. On the other hand, we aren't going to develop uneconomic offers just for the sake of subscriber growth. Our churn rate of 1.83% was about where we expected given normal seasonality and will likely decline in the fourth quarter, consistent with prior years. Subscriber-related revenue grew 1.4% year-over-year, driven by a 3.5% increase in ARPU but offset by a 2.4% year-over-year reduction in subscribers. As Joe mentioned, ARPU growth fell short of expectations. Premium revenue is down as we did not drive enough sell up to movie channels. We've launched marketing programs and call-center initiatives in an effort to reverse that trend. Pay-per-view revenue was also down, although we expect modest sequential improvement in the fourth quarter due to normal seasonality. Finally, we saw less upgrade revenue year-over-year as a larger percentage of our base already has MPEG-4 equipment. The offset to that revenue decline is that our capital spending for upgrade events has decreased steadily during the last several quarters. Total company revenue grow -- grew by 12.3% year-over-year, driven by the incorporation of Blockbuster into our results. Subscriber-related expenses increased by 1.1% compared to third quarter last year. We continue to drive down our variable cost through process improvements in operations. These variable cost reductions were offset by higher programming expenses. The programming expense increase was due to contractual rate increases and was consistent with the trends we have seen during the last few years. Total cost of sales increased year-over-year as 2010 did not include Blockbuster's results. I mentioned this last quarter but it is worth repeating. We were able to purchase the Blockbuster assets at far lower price than their previous book value. As a result, we saw lower-than-historical levels for Blockbuster cost of sales in the third quarter. This impact will diminish over time as Blockbuster's inventory is replenished with new content. While the Blockbuster business was roughly breakeven in the third quarter, we still have a lot of work ahead of us on the retail stores. Our focus is to keep the retail stores at least at the breakeven level while we test new marketing ideas both integrated with the pay-TV business and standalone. Total subscriber acquisition costs were down considerably year-over-year due to the lower activation levels. Subscriber cost per activation of $789 was roughly flat with last year. We are starting to see an increase in the percentage of redeployed receivers as our installed base of MPEG-4 receivers has increased. Administrative expenses were also impacted by the Blockbuster acquisition. G&A expenses for the DISH pay-TV business were largely consistent with recent trends. Net income was up 30% versus third quarter last year. This improvement was driven by the price increase in February, the lower activation levels and litigation accruals last year, offset by increased interest expense this year due to the higher debt levels. We generated $542 million of free cash flow in the quarter and almost $1.4 billion through the first 9 months this year. Improved year-over-year net income, less capital spending and favorable cash-versus-book taxes have all contributed to this performance. There were 2 significant changes on the balance sheet versus last quarter: first, we included the TerreStar transaction within non-occurring assets; and second, our inventory levels increased at both DISH and Blockbuster. The inventory increase at DISH was due to the weak activation levels we've seen in the last 2 quarters. The Blockbuster inventory change was needed to increase the availability of recent releases at the retail stores. While we have largely funded the DBSD and TerreStar acquisitions, the timing of these deals' closing depends on FCC approval. These acquisitions will be consolidated as of their closing dates. Let me now turn it back to Joe before we start Q&A. Joseph P. Clayton: Thanks, Robert. Progress was made in the third quarter. Was it enough? No, but we are moving in the right direction. We hope to utilize our fourth quarter performance and sales momentum as a springboard into the new year and a new brand image, new products, new consumer offers and new opportunities. Thanks for listening today. Now we'll open it up to your questions.

[Operator Instructions] Your first question comes from Marci Ryvicker with Wells Fargo. Marci Ryvicker - Wells Fargo Securities, LLC, Research Division: Two questions. First of all, just expanding on ARPU. Joe, you mentioned it was a little soft, I think we would agree, versus your expectations. But 10-Q says there was a decrease in pay-per-view and premium revenue, there was a decrease in hardware upgrade events. Did advertising impact you? And how should we think about ARPU now? And I have a question for Charlie. Robert E. Olson: Yes, Marci, this is Robert. I think advertising impacted us to the extent that we've seen pretty solid growth in advertising sales over the past few years. And we just didn't see that year-over-year growth in the third quarter. So the -- as we stated in the Q, the declines we saw were in the premium pay-per-view area but we just didn't recognize the growth we have been seeing historically in advertising. Marci Ryvicker - Wells Fargo Securities, LLC, Research Division: Okay then, are those sort of continuing? Robert E. Olson: We certainly hope not. We have a new leader in advertising who has very, very strong ideas and we expect improvement in that area. Marci Ryvicker - Wells Fargo Securities, LLC, Research Division: Great. And then just a question for Charlie. I think a positive surprise was the dividend. Anything driving this capital's return decision? Charles W. Ergen: Well, probably the biggest thing is the environment that we expect to be out there from a governmental point of view is in the sense the tax policy is probably going to change, so -- and probably not for the better from a dividend perspective, so we had a strong cash flow quarter. So you combine those 2 things together and we didn't really have a -- we'd look at some other investments in acquisitions and weren't able to do those. So if you put all those things together and a nonrecurring dividend made some sense.

Your next question comes from Stefan Anninger with Credit Suisse. Stefan Anninger - Crédit Suisse AG, Research Division: Could you provide us with a little bit more color on the variable cost reductions within your subrelated expense line? I believe your filing indicates that the programming expense growth is offset by lower call center expenses and I think Bernie Han has been working hard in these areas. Maybe you could describe some of the things that you are working on to reduce those variable expenses and how we should think about subscriber-related expense growth going forward. It's done so well, I'm just curious how you look at it going forward. Robert E. Olson: Yes, Stefan, this is Robert. I'll start and then I'll let Bernie take over from there. We have seen a reduction in variable costs. And as you know from following our calls, we've had that pretty steady reduction over the last 1 to 2 years. It is a result of us making changes in the process and then the automation around our operations. So let me turn it to Bernie. He'll give you some more specifics. Bernard L. Han: Yes, there's -- as you mentioned, we've been working on this long and hard for the last few years. We look internally at all the reasons that customers call us. And we generally do anytime a customer calls us and talks to an agent, it's something we'd like to try to avoid either because they could ideally self-serve themselves or we cause the problem upstream that should be net upstream and not result in a call down the road. So we've been doing a lot of things working with our sales and marketing group to make sure that disclosures are adequate at the front end when we sell to customers so they're not later surprised. We're putting in place a lot of automation through our IVR, through our website. We're putting in a lot of training with our agents to make sure when they're handling technical problems, they handle them correctly the first time. So we've been pretty pleased over the last couple of years with the progress we've made with call reduction. We hope we're -- there's still quite a bit left to be gained. At the same time, we've made some pretty big system changes. We're in the process of making some pretty big system changes that will hopefully help. Just in this quarter, we completed 2 pretty big migrations. The first one was what we call our workforce management system, which is what our field technicians use to open, close and change work orders while they're at customers' homes. Second, we migrated to a new voice -- or new IVR system, which is what our customers first hear when they call DISH Network. And both of them were completed smoothly during this first quarter -- or during this third quarter. As we've mentioned before, we have a bigger billing conversion happening at the end of the first quarter next year. We're working hard on that and hopefully that will go smoothly, and then we have some changes to be made to some of our agent tools later in the year as well. Stefan Anninger - Crédit Suisse AG, Research Division: Actually, just a quick follow up, and I guess with that, does that mean that you're optimistic that on an absolute basis, those costs can continue to decline? Bernard L. Han: They absolutely can. We're -- obviously, we're -- at some point, we're hitting diminishing returns. The opportunities that were the biggest, I think we've captured a lot already. But that said, I think there's still opportunity out there and I think how the system -- the remaining system migrations go will play a big part in how much more we can get. We're also spending more resources as of late on the operations side trying to support initiatives related to ARPU, churn and acquisitions. So we've got to balance our resources a little bit more towards helping out the rest of the business.

Your next question comes from Jason Bazinet with Citi. Jason B. Bazinet - Citigroup Inc, Research Division: I just had a question for Mr. Ergen. It seems like for 10 years, the Street has been sort of focused on the cable bundle versus sort of a standalone satellite offering. And most people, I think, would say that satellite broad brush stroke has competed far more effectively than most people thought years ago. It seems to me this last quarter, there was a market change in terms of the narrative coming out of the cable companies where they're emphasizing the bundle less and beginning to talk about emphasizing standalone data more, and I just wonder if you could sort of elaborate on -- it seems to me broadly that, that should be a very big positive for satellite, and I just love any commentary. Charles W. Ergen: Well, I mean, I think from a macro point of view, I don't know if I can answer the question. But clearly, DirecTV's results showed that there's still a big business out there for satellite television on a stand-alone basis. In fact in the rest of the industry, absent the phone companies, it really was negative. So I think there's still business out there in satellite, still the most efficient way to deliver a video. We're just not getting our fair share yet. Having said that, the other macro trend is we're continuing to use -- more consumers are consuming more bits and bytes of that -- of 0s and 1s could be data, could be video, could be voice. So I think that strategically, we believe we have to be in something other than a standalone video business as a company, and we are in the transition of being able to do that. That's going to take some time and that is unclear whether that is going to be a smart business decision or not. But we think that the way the 0s and 1s come together are going to be beyond just video and it's going to -- you're going to need to be beyond fixed video to the home. So that's a path that we're on strategically and we think that's going to pay dividends for us long term. Jason B. Bazinet - Citigroup Inc, Research Division: Has there been anything within the effort you have with Charter that's noteworthy in terms of their broadband? Charles W. Ergen: I can't speak to that. Tom, you're -- or Joe, want to speak to that? Thomas A. Cullen: We continue to work with Charter. As they said on their call, they're -- I'm sorry, this is Tom Cullen. They're seeing themselves increasingly as more of an ISP. And obviously, the margins on broadband are much more attractive to them and everyone else than the video business. So our efforts with Charter continue. We're selling video. They're selling broadband increasingly. Customers, I think, are okay not having a single bundled bill and there's nothing dramatically different this quarter than what we reported previously.

Your next question comes from Vijay Jayant with ISI Group. Vijay A. Jayant - ISI Group Inc., Research Division: Question on both fans [ph] I mean, what proportion of your base, obviously, with the enterprise's undertaking being successful this quarter, have you seen the impact sort of played out on your supplier base, especially as you come up with the contracts with ESPN going forward? Just want to get some sense on how that's trending. And then just 2 -- just housekeeping questions. The Movie Pass ARPU, will that be in DISH Network or in Blockbuster? And given that your working capital use of availability every year is generally a benefit, given what's been used up so far, should we expect a massive benefit in 4Q? Joseph P. Clayton: I'll try 1 and 2 and I'll give 3 to Robert. We're seeing all sports programming going up significantly. Whether it's ESPN or regional sports networks, they'll have a negative impact on our margin because the cost of our program will increase as we go forward. And that's not just for us, it's for all providers. And secondly, in terms of the DISH-Blockbuster situation, the income as they roll off, this is a DISH promotion using Blockbuster assets as well, all of the direct mail portion of it, so this will be a DISH income statement item. In terms of the capital, Robert? Robert E. Olson: Yes, just to clarify, Vijay, the Movie Pass revenue will show up in ARPU. There will be an expense credit to the Blockbuster business for the expenses of providing the DVDs. And then, Vijay, just to get your last question, could you repeat it please? Vijay A. Jayant - ISI Group Inc., Research Division: I mean, generally that working capital use at DISH, working capital has been a benefit to free cash flow generally, and I think for year-to-date, it's probably a little negative. I just want to see whether -- will there going to be a big robust in 4Q? Robert E. Olson: Yes, so you can break working capital as -- there's a few different big items. From a cash perspective, we spent -- or we've paid far less in cash taxes than our book taxes this year. A good chunk of that has been driven by the stimulus act of 100% bonus depreciation. The tax situation for 2012 is not completely clear. Right now, it looks like it'll be 50% bonus depreciation for 2012. If that's the case, that won't turn around in 2012. It'll be more like 2013. The other part of our working capital that has actually been a bit of a negative as you pointed out has been inventory. Inventory was -- grew in the third quarter, largely due to the weak sales we had in second and third quarter. As you recall from our prior earnings calls, we order receivers from EchoStar, typically 6 to 9 months in advance and to the extent we had weak sales that built out -- built up inventory. We expect that to reverse in future quarters.

Your next question comes from Ben Swinburne with Morgan Stanley. Benjamin Swinburne - Morgan Stanley, Research Division: I don't know if you're willing to comment, Charlie. I wanted to ask you about the FCC process on the TerreStar-DBSD front. Some of the comments were focused on -- I think Sprint had a comment around keeping AT&T and Verizon from accessing the spectrum down the road, and also there were some comments about PCS interference. I don't know if you want to comment on either of those, and maybe just more generally, are there options in front of you here to walk away from these if in fact -- I know it's probably highly unlikely, but in fact the FCC comes back to you with requirements that just are not palatable? Charles W. Ergen: Okay. Stan, you may want to help me out here. In general, as we're in front of the FCC, we actually started 7 months ago with the DBSD filing in front of the FCC, so it's been going on for quite a bit of time. TerreStar was added several months ago. And the comment period is now over; formal comment period is now over, so the FCC should have all the information they have to make the decision to approve our acquisition merger of those 2 companies, which should give us about 40 megahertz of spectrum nationwide, along with the 6 megahertz to 700 megahertz spectrum that we have for most of the country, so it will put us in a decent spectrum position. There haven't -- on the filings and sales event, I view it as very positive that the interference, there was no real as both the LightSquared, the EPS industry came in and says there's not interference from our frequencies. I think as the PCS brand has said nothing on it or they weren't really... R. Stanton Dodge: They were not the ones who raised the issue, the potential issue. Charles W. Ergen: Yes, so we don't think that's there's -- based on the precedents that are out there in the spectrum and the interference limitations, we don't think there's a big limiting factor on our spectrum from an interference perspective. And to the extent there is interference, that's more on the uplink side, where you don't use as much. So we've got -- the spectrum itself is pretty clean, about as clean as throughout the spectrum as you could kind of hope for in this world. Most of the comments have centered around really that there should be a further rule-making on the MSO spectrum and the use of it terrestrially as opposed to granting our request. LightSquared went through that. The Commission's got a good precedent that they can rule on that. We are already using the spectrum from a DBS -- I mean, from a TerreStar's perspective, we are already -- they are already using the spectrum, so it's quite a bit different than maybe what's some of the people bashing on rule-making. So we're optimistic that the FCC can rule in a timely manner. And it's essential they rule in a timely manner because obviously, we're -- we have -- there's a lot of things you have to do if you want to enter the wireless space, not the least of which is to get chipsets and handset manufacturers to use your chipset and then, of course, you've got to build your network out. So there's a lot of work and that's not something you do overnight. So we really can't walk away from the acquisitions. We would -- we obviously would to the extent that the FCC put -- did not approve it or put unreasonable conditions on it, we would have significant risk and we'd take a big loss if that were to be the case. Again, all I can go by is the public statements of our Congress and our President and the FCC themselves, where they want competition in this space and they want to see United States be a leader in wireless and not a follower. And we're a company that has a track record and are willing to go out into the space. So if you take the government at their word, then you make -- we've made a big bet. Sometimes that what you hear from Washington is in all place what they really mean and sometimes politics can come into play and sometimes you can be surprised. But my expectation is that in relatively short order, we should get approval for the merger. There could be conditions on the merger. We have to see what those conditions are and whether those would be -- would allow us to compete or not. The second thing that we have to -- so that's kind of one big picture and -- that we have to see play out. The second big thing, of course, is the AT&T/T-Mobile potential merger, which may be allowed to go through and if so, would there be conditions on that merger and what would those conditions be and how might that affect other entrants into the marketplace? Or that merger may not be allowed, and if that -- and how does that then reshuffle the deck in the wireless field and what opportunities would there be for us based on that? So the way I look at it is, we believe that the wireless business is a place where -- if we're in the video business, we need to be more than fixed, we need to be a mobile video as well. The wireless spectrum that we're attempting to acquire allows us to be able to do that. And we have a seat at the table, depending on what happens on our application. It depends on what happens on AT&T's applications. So I think it's a good spot to be. There's no guarantees that's going to pan out from an investment point of view. But to do -- I felt it was riskier to do nothing than it was to be aggressive and try to enter the marketplace, and particularly based on what I believe Washington would like to see this country go. And we're a job creator, we're a competition creator, we're -- we can be disruptive to industries; we have a track record of doing it before. There's no question that AT&T mobile doesn't create jobs. They're going to move 5,000 jobs onshore and probably eliminate 200,000 jobs when they merge the companies because they don't need multiple CFOs and multiple vice presidents and multiple managers and multiple call centers and multiple operations, so that's a job eliminator, not a job creator. We're a job creator so we'll have to see how that plays out, but I think that's a logical bet for us to make. Benjamin Swinburne - Morgan Stanley, Research Division: Great. And if I could just ask one follow-up to Charlie and/or Joe. And a lot of the sort of popular press continues to write about the need for smaller packages of programming, cheaper packages of programming, and I know DISH has tried that in the past with some low-end $25, $20 packages. And Time Warner Cable has one that they commented on their call that the demand has been pretty modest so far. I think you guys have a sports-free offer in New York, because you don't carry the RSNs here. Do you see that as a sort of a strategy going forward to try to take share, to sort of go after maybe a lower-end product? And if you do, what's the timing look like on rolling this more out and putting some marketing punch behind it? Joseph P. Clayton: This is Joe Clayton. I'll try to take that. Charlie can comment if he'd like. I'm a big believer in having step-up selling and a good/better/best, if you will. And just recently, we incorporated into our programming offers a $19.99 starting package, if you will. And if we do this right, we will have variety selection and choice as a major differentiator for DISH in addition to a value that we create with our customers and also as we move forward, technical superiority in terms of our product. So yes, it's an important part of our marketing equation. And yes, we have already begun to implement that. But most importantly, we are still -- even at $19.99, we're looking for quality customers that have appropriate credit scores so they won't churn on us in a year or so. Charles W. Ergen: This is Charlie. Just to -- I think this is going to be interesting because the price of sports programming has gotten so kind of out of line compared to what that -- so sports programming may be 20% of the viewing on a day-to-day basis but it may be 50% of the cost that the consumer pays, and so not everybody is -- probably most people in this call are sports enthusiast but not everybody is. And it's going to be interesting what happens because you've really got 4 providers in every market now, the phone company, cable company and 2 satellite companies so -- and everybody sells the same thing, everybody's packages are generally the same. And contractually, the sports providers require that you put their program in a vast majority of their contracts. So as contracts come up for renewal, I would say there could be a day when one of the big providers just doesn't have a sports offering so they can differentiate their programming in a major way so they -- I mean, in theory, their cost could be cut by half to the consumer but the consumer who really likes sports, those 20% or 30% of the people who are sports enthusiasts, would not be your customer. But you'd be more attractive to the other 50% or 60% or 70% of the customers that are out there. And if the economy continues to struggle along, that's probably a valid long-term strategy. We almost went there last year with FOX Sports. We ultimately were able to reach an agreement. But had we not, we were certainly prepared to not have regional sports. We don't do it in New York today, as an example, and we certainly have plenty of customers in New York. So I think that there's a limit to where sports cost can go and at some point, it's not going to be in 90% of the homes at some point if the costs go too high. So that is interesting to see, how it shakes out, and we're -- we look when -- we just look at that on a case-by-case, we'd like to -- I think we'd like to have sports. We'd like to have a lot of variety for our customers but we have to have deals that make sense. And there certainly becomes a time when a deal doesn't make any sense and a sports offering might not make sense, and that's been the case for us in New York. It could happen in other places.

Your next question comes from Doug Mitchelson with Deutsche Bank. Douglas D. Mitchelson - Deutsche Bank AG, Research Division: There's a couple of questions for Charlie. Charlie, you mentioned the need for DISH to go beyond fixed video to home, continuing theme in the last few calls. For the most parts, what is visible to investors has been the pursuit of wireless assets to the extent you want DISH to move beyond fixed video at the home. Do you think wireless will be sufficient to fulfill your vision or will you still also have to ride cable and wired networks to the home for parts of your services? Charles W. Ergen: No, well, I think that if you look at mobile video, of course, obviously, we wouldn't have to. We could control our own destiny from a mobile perspective, but if you're looking at it from a fixed data perspective, I certainly think that the wired infrastructure is probably for the vast majority of homes, both on cable and phone companies, the more economical way to do it. But having said that, obviously, you look at the way people are going to consume video, when you look at tablets and phones and -- this ought to be pretty compelling from a video perspective. And I think that to be able to offer customers video in a fixed and mobile basis could be -- is a kind of thing from a competitive point of view that Joe and his team can market at a whole new level because it's such a differentiating potential item. The third thing is going to be -- and I think the cable guys are working on this quite a bit is that the Wi-Fi hotspots continues to be a place that everybody can -- that are more -- they're getting pretty ubiquitous in a place where people go now to consume lots of video and data and that's additional places where we can play without owning the spectrum as well. Having said that, owning spectrum could help us in those areas as well. So I like spectrum. The government is not printing any more of it. It's the macro trend of data consumption is growing. It continues to grow in an exponential rate. And there's a huge paradigm shift in the technology to LTE from 3G and really even 4G is not really in its infancy. So it's almost like going from MPEG-1 to MPEG-2 to MPEG-4 in the next couple of years and so it's a good time to enter the marketplace because you're going to enter with a new technology that's more efficient than the technologies that are out there today, that people already invested in and haven't fully depreciated yet. So there's a lot of interesting dynamics that are going on and, like anything else, in technology, timing is critical. And so far, I feel pretty good about our timing even though it's not going to go as fast as perhaps people in this call wanted to go, it's not going to make a difference in the next quarter and the next quarter after that, but it's going to make a difference in years to come. Douglas D. Mitchelson - Deutsche Bank AG, Research Division: Well, the reason I want to talk about the networks a bit is because there is a press article out this morning saying that you're talking to programmers about streaming channels online and an over-the-top package. I'm sure you really want to spend time telling us all in this forum all about that. But to the extent that you're still going to be riding the wire into the home, I was curious about the competitive positioning to the extent that you start launching over-the-top service or even streaming today for DISH customers to the extent that the product quality isn't under your control, is that something strategically that you worry about? Charles W. Ergen: It is and that's why we're -- that's why net neutrality is important to our industry. Netflix, I've read reports there's about 1/3 of the data which is streaming video to the home and, obviously, they need to not be discriminated against to have a business. I think that all of us in the video business are looking at streaming video. We stream video today and -- as do our competitors. And I think that we have to be -- feel secure that, that pipe to the home is going to be not discriminated against and -- but it's going to be interesting to see because the Achilles' heel, potentially, of streaming video is that the advent of bit buckets and limits on the number of bits you can stream and then your price goes up. That Netflix subscription of $8.99 -- $7.99 can go to an extra $20 a month for bit streaming might be an equivalent of $27.99, so they don't control that piece of it. So that's something that we have to watch and net neutrality is being challenged in the course today and that would be certainly a risk for all of us who are not in the wired business to the home. And it's why I like wireless. Douglas D. Mitchelson - Deutsche Bank AG, Research Division: And the last part of this is do you think the programmers are ready to start thinking about their business beyond the basic bundle? Are they ready to start to -- are they ready to be thoughtful about the future as you see it? Charles W. Ergen: I think they definitely are. I think they have a conundrum of how do you maximize your revenue given the change in dynamics in the industry and you have the vast majority of your income coming from long-term contracts with the current MVPDs out there and you have new entrants like Amazon and Apple and Netflix, and how do you want -- once you carve it up, one reason our premium business is down is and I think as a general statement I would expect the industry is down from an MVPD perspective is when someone can buy Netflix for $7.99, do they really want to pay $14.99 for HBO? And so when people look at their pocketbooks, obviously, every time somebody subscribes to Netflix, it's probably 1/2 of a customer that our industry loses from a premium perspective. So my -- I continue to see premium programming trends going down from our current business. But for those providers, they can sell their programming to other new entrants and their total dollars may go up. So they're all looking at that. They got to run their own models. They have to decide which model works best for them. And we certainly have lots of conversations about what we think the best model should be, but they have to make their own decisions on how they're going to do that. And we have to be positioned as a company that no matter what they decide, we have a way to survive in that environment. And that's kind of the long-term things that I get to work on, thank goodness.

Your next question comes from Jeff Wlodarczak with Pivotal Research. Jeffrey Duncan Wlodarczak - Pivotal Research Group LLC: This is Jeff Wlodarczak. Charlie, continuing on the rising programming costs, besides sports programming obviously, retran is another big driver of programming cost. Is it realistic to assume the SEC is going to do something about fixing retran? And I have a follow-up. Charles W. Ergen: I don't think anybody's going to do anything to fix it. Washington can't fix the budget, much less fix a market retrans problem. So I think we're in an environment of rising costs both on the retrans and programming cost environment. And ultimately, we'll get to a point where the costs will get so high that people's net profits will go down because people will -- I've been through this. I've been through that as a big DISH business, when it gets too expensive, people will steal it. And you can go to the Internet today and watch virtually anything for free. And the higher that costs gets the more people learn how to do that. And so the best way to prevent piracy is to have a fair product and give people a lot of choice. And there'll be a point where those costs will hurt. It hasn't really happened yet but it could. We're not raising our price next year so our margins will suffer because we believe that there's not -- from a competitive point of view, we don't believe we can raise prices. So in part and also a new billing system going in, so we don't want to be messing with people's bills or with the new billing system in place. So we'll have to wait and see, but we have to prepare ourselves that there's a limit to the price increases that could be passed on to consumers. The technology is changing and how do we want to adapt in that environment? And that's what management is all about. And you have to make some long-term decisions in that to get on the right side of the trends and that's really what we're attempting to do. And so we just have a very long-term strategy that says we're going to be competitive in that environment that we think is going to be out there in 2 or 3 years. Jeffrey Duncan Wlodarczak - Pivotal Research Group LLC: And then 2 follow-ups to what you just said. One obviously to mitigate programming price increases just to get bigger, do you think because of this success of you versus FiOS, that a merger with DirecTV has any better chance than did last time getting by regulators? And then you mentioned over-the-top. Are you guys seeing a material number of subs actually swapping up to some sort of over-the-top solution? Charles W. Ergen: On the first one, I'd say it depends on -- I think I'd look at what happens at AT&T and T-Mobile. If that merger is allowed to go forward, then I don't think that there'll be any problem with us merging with DirecTV. Then there'll probably be a lot of mergers that could happen, that people never thought could happen. If that merger is not allowed to go through, then I think that the merge with DirecTV would be problematic. On the over-the-top stuff, I think that we are already -- I think that we do lose revenue because over-the-top, Netflix is probably the best example where we lose premium programming revenue because 20% of our customers are in fact Netflix subscribers as well. And when they're Netflix subscribers, they don't continue to subscribe to Showtime and HBO and Stars. In fact, they don't subscribe to Stars at all because they can get all those movies released today from Netflix. So that has some impact. The other impact that it has is people actually -- people are, particularly young people who move to an apartment or get a house for the first time, don't subscribe to any MVPD and they just -- they only get their video over-the-top and they get a Hulu and they get their network programming from Hulu and they get Netflix and they get other programming and they just search until they find something they want to watch the same way we used to watch TV by changing channels and go channel up and channel down. We'd stop on the channel we like and they do that today and they're not about to, say, as an industry where people pay between $70 and $92 a month, that's a lot of money to a young person today who is getting their first job when they can go out and watch Hulu for free and Netflix for $7.99. So it's a threat. It's a long-term macro trend that is a threat to our industry and it's going to be interesting to see how programmers decide -- each program will probably make different decisions on how they attack that market and some people have stronger programming. Some people have programming that's very strong but they don't get paid their fair share for it. Some people have programming that's not so strong but they have a lot of power because they own networks or broadcasting networks. And so ultimately, you're going to have a pretty -- if you have a pretty level playing field then the strength of content will prevail and whoever has the best forms of distribution will prevail and that's the environment we have to prepare for. So it's -- this is not a time when you can sit back and rest on your laurels. It's a time where you have to have real plans and real strategies and make real changes to the way you do business, and that's always painful but to me, it's very exciting and I'm glad that Joe has joined to run the day to day of DISH Network and bring a better marketing emphasis to where we're going. And Tom and I get to go out and try to figure out where we are going to go long term, compete in what I think is going to be a very different environment 2 or 3 years from now. And it's a great time to do it because we're -- the economy is not cranking along too good. It's a great time to change your business for when the economy does change a little bit.

Your next question comes from Tuna Amobi with Standard & Poor's. Tuna N. Amobi - S&P Equity Research: So I wanted to get a sense where you're getting the most pushback in terms of content rise, which Joe alluded to. If you can provide a little bit more specifics on why the studios are -- seem to be unenthusiastic according to your language. I know that you increased the price of your kiosk offering. I'm wondering if that was kind of a byproduct of some of those resistance that you are facing. And also with regard to the 600,000, I believe you said, Movie Pass subscribers that you've seen in the first few months, which seems like encouraging, I wanted to get a sense where the bulk of those or what portion of those subscribers are existing subscribers that are kind of upselling or been upsold from the pay-TV to the streaming package as opposed to entirely new DISH pay-TV subscribers. Thomas A. Cullen: Tuna, this is Tom. Let me take them in order. In terms of the studios, first of all, it's not all studios in lockstep in terms of their changes or their desired changes on windowing and pricing and their view of physical distribution. As Joe pointed out, I think we're disappointed that they don't see the consumer promotional benefit of being in the stores, some of them. But we continue to work with them and I think it's beyond just the kiosk business. I think they're looking at the impacts on new release retail sales, as well as increased windowing in the digital arena. So I think it's not a point-in-time change, it's probably an evolution in how they're looking at their business. Secondly, regarding kiosk, just to clarify, even though the NCR kiosk business carries the Blockbuster brand today and as you are probably aware, that branding is in litigation, that wasn't our decision to raise those prices. They run that business completely independent of Blockbuster and there is a revenue share back to Blockbuster. And then thirdly, the -- on the combo passes, first of all let me clarify, that's an offering where you can have a one out, 2 out or 3 out per month -- I'm sorry, one-time movies in the by mail service, but what we've done is combine that with the store presence so that a consumer can have one out, 2 out or 3 out, not necessarily only using by mail but having the convenience of going to the store for unlimited exchanges during the month. There we have grown at the enrollments in that program up to 600,000 and that's a combination of both local store marketing activities as well as the activity that's coming through the DISH promotion. So a little early to tell so first of all, not all of them are DISH subscribers. We are seeing revived foot traffic from previous users of the Blockbuster retail locations that are coming in and looking at this as an attractive deal and there still -- they may be subscribers of some other MVPD service. However, in each of those packaging examples, there was a 30-day free period so it's a little early to tell what the ongoing pay-through will be on each of those programs. Tuna N. Amobi - S&P Equity Research: Okay, those are all very helpful clarifications.

Your next question comes from Craig Moffett with Sanford Bernstein. Craig Moffett - Sanford C. Bernstein & Co., LLC., Research Division: Charlie, you said in the past that your preference is to do something in wireless with partners. But can you say more about your web of relationships? Would you categorically say you would not try to pursue wireless unless you have partners to do it with or how should we think about that? And when you talked about acquisitions earlier, can you just add some more color to that? Were you talking about just Hulu or were you thinking about other possible acquisitions that you tried to make and weren't able to get the deal done? Charles W. Ergen: Well, from the acquisition point of view, we look at a lot of different things. I think the press talked about this. We did look at Hulu; it was one but we have looked at others. Second, we're prepared to go on a wireless by ourself if we get approval and we have a roadmap to compete, and then we would be prepared to go by ourselves. Having said that, the desired path and I think the most prudent path, I think the most -- the path that's got the greatest chance of success would be to partner with others. And there could be a variety of different people that could fit that bill, some in the business today and some that aren't in the business today but have -- would have similar motivations to us. So until we see where the -- where our -- again until we see where the FCC comes down on our application and until we see where the AT&T/T-mobile comes out, we just don't know what that environment looks like. But once the landscape is set, then there'll be -- we'll be a natural partner for some people and probably not be a natural partner for others and some people, even if you are a natural partner doesn't mean you get the deal done. That makes sense for both parties and I believe that there -- so I believe there is a path for us to go it alone but I think that's a little different strategy and probably wouldn't be my first choice today. Craig Moffett - Sanford C. Bernstein & Co., LLC., Research Division: Charlie, If I can just follow-up, I mean, you've always been pretty disciplined about return on invested capital. What kind of return on invested capital model would you have in mind for a wireless business given that there is so many uncertainties here? I suspect the question that lots of your investors are struggling with, which is how do we think about the valuation of a stock when it faces something as uncertain as what you might do in wireless? Charles W. Ergen: That's really your problem, how you evaluate. I look at it a little differently, which is there's tremendous business opportunity for the wireless side and the macro trends of data consumption, our 0s and 1s consumption. And therefore, I believe there is a way to make a lot of money in that. And I think -- we run models internally so quite frankly, the models are so dependent on today or so dependent on decisions at Washington that their -- that the best you can do is get kind of a range of where you might end up. And so we kind of look at what the things that might happen in Washington and then it kind of leads us in one direction or the other. But every model, assuming that the government wants to create jobs and the government wants to create competition, if you believe that, then I think there's a lot of ways for us to compete in the business beyond where we are today and, again, all I can tell you is I'm a shareholder. I'm not selling any stock. So -- and I'm a capitalist and believe that I should try to increase my net worth and so how would I increase -- the best way for me to increase my net worth is to take the company -- the companies that we have and change them, take advantage of the trends that are out there. And take all the good things that we have and all the infrastructure that we have and all the foundation that we have and take that foundation and have it play into future markets, which essentially is pretty easy. We're in fixed video today. We hope we're going to get the mobile voice and data and video business, and we'd probably likely do that in some kind of partnership or partnerships if we're allowed to do it. But it might not end up that way and we try -- I tried to partner in the video-DBS business. The first place I went was to DirecTV and said, "Let's partner together." They didn't -- they decided that, that wasn't in their best interest. But I try to partner with a lot of people in that business and nobody would build a satellite for us, nobody would give us a launch, nobody would partner with us and so we had to go it alone. Thank goodness, right? Well, I guarantee you we will try the same thing. We have a lot more people that we can go to try to partner with. I think we have a better track record today. I think people will take us more seriously, but it doesn't mean you can get to something that makes sense. But there's 2 really big guys in wireless, in Verizon and AT&T, and they need some competition. Craig Moffett - Sanford C. Bernstein & Co., LLC., Research Division: I guess it's not going to be one of them then? Charles W. Ergen: It could be. If the merger is not allowed then it could be. Right? If the merger is allowed, it won't be AT&T. Right? Probably not. I mean, I probably wouldn't -- they probably wouldn't pass regulatory muster, they'd be my guess but...

Operator, I think we've hit our time limit here, so we're to next time, next year end, around the first of March, I guess. Stephanie, I think we've exceeded our time limit.

Thank you. This concludes today's conference call. You may now disconnect.