Jason Kiser - Treasurer R. Stanton Dodge - Executive Vice President, General Counsel and Secretary Joseph P. Clayton - Chief Executive Officer, President and Director Robert E. Olson - Chief Financial Officer, Principal Accounting Officer and Executive Vice President Charles W. Ergen - Co-Founder and Chairman Thomas A. Cullen - Executive Vice President of Corporate Development Bob Toevs

Philip Cusick - JP Morgan Chase & Co, Research Division Marci Ryvicker - Wells Fargo Securities, LLC, Research Division Douglas D. Mitchelson - Deutsche Bank AG, Research Division Benjamin Swinburne - Morgan Stanley, Research Division Bryan D. Kraft - Evercore Partners Inc., Research Division Amy Yong - Macquarie Research Jaison T. Blair - Telsey Advisory Group LLC Vijay A. Jayant - ISI Group Inc., Research Division Tuna N. Amobi - S&P Equity Research Matthew J. Harrigan - Wunderlich Securities Inc., Research Division

Good afternoon. My name is Tracy, and I will be your conference operator today. At this time, I would like to welcome everyone to the DISH Network Corporation Q4 2012 Earnings Conference Call. [Operator Instructions] Thank you, I will now introduce and turn the call over to Mr. Jason Kiser, VP, Treasurer. You may begin your conference.

Thanks, Tracy. Thanks for joining us. My name is Jason Kiser. I'm the Treasurer here at DISH Network. I'm joined today by Charlie Ergen, our Chairman; Joe Clayton, our CEO; Bernie Han, our COO; Robert Olson, our CFO; Paul Orban, our Controller; and Stanton Dodge, our General Counsel. Both Joe and Robert have some prepared remarks that they'd like to go through before we open it up for Q&A. And then following the analyst portion of the call, we're also going to invite the press to ask some questions as well. But before we do all that, we do need to do our Safe Harbor disclosures. So for that, we'll turn it over to Stanton. R. Stanton Dodge: Thanks, Jason. We ask that media representatives 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 results expressed or implied by such forward-looking statements. For a list of those factors, please refer to the front of our 10-K. 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, which we assume no responsibility for updating. And with that out of the way, I'll turn it back over to -- or I'll turn it over to Joe. Joseph P. Clayton: Thanks, Stanton, and good afternoon to those of you on the East Coast and good morning to our West Coast participants. We at DISH continue to invest in a portfolio of assets that will serve as the foundation for our long-term growth. First and foremost on everyone's mind today is our wireless spectrum investment. We were pleased to have some clarity on our S-band spectrum as a result of the FCC's recent rulemaking process, plus Charlie is here to take your questions on wireless a little later. Next, let me give you all an update on Blockbuster. First, we're shutting down 300 unprofitable domestic stores in the next few months. This will leave us with approximately 500 stores, and we'll continue to evaluate these over the coming months. Going forward, we'll focus on maximizing value from this brand and monetizing the nonstrategic assets. So at DISH today, it is clear that we embrace change. We embrace technology, and most importantly, we embrace the consumer. We're using innovation to make consumers' viewing experience easier and simpler. That is why unlike many content providers and broadcasters, we're willing to take risk and to make changes to our existing technology and business model. And to win in a sea of sameness, which is the nature of today's pay-TV market, we must distinctively differentiate our products and services. And this is what DISH has been doing over the last year, all with an eye on what the consumer is willing to pay. In order to provide the best value to consumers and to generate a return on our investment, we do not shy away from making difficult decisions, including taking down channels from time to time, which has been necessary to combat the spiraling cost of programming. This was especially true in a year where DISH did not increase programming prices to our customers. So in 2012, we achieved our goals of growing high-value subscribers, increasing revenue and investing for long-term growth. As reported, we changed our pay-TV subscriber trajectory. DISH turned in significant year-over-year improvement in both activations and churn. In 2011, we lost 166,000 pay-TV subscribers. Last year, we added 89,000 new customers for a year-over-year improvement of 255,000. Now a large portion of this growth was driven by our award-winning Whole-Home HD DVR, the Hopper. In addition to Hopper, our other 2012 product achievement was dishNET. In October, we launched a new broadband satellite service, which makes available faster speeds, greater capacity and lower cost to more than 15 million underserved American homes. Now after the launch of dishNET, we generated significant broadband growth by adding 44,000 net subscribers in the fourth quarter. We ended the year with 183,000 dishNET customers, both satellite and wireline. These customers are nearly 100% attached to our DISH pay-TV service. Understanding the importance of owning the bundle, we expect these dishNET customers to provide incremental value over the coming year with higher revenue and lower churn. Okay. So what's new for 2013? At DISH, we know that customers want their video content to be affordable, easy to use and available anywhere. Americans are not making a gradual shift to mobile entertainment, it's a full-blown sprint. And as a result of actually hearing consumers, we've developed a host of new features to meet this ever-growing demand for mobility. Our first step was to incorporate the patented Sling technology inside the next-generation Hopper. Now you all may remember that DISH has had this technology since 2007, when our new DISH Anywhere capability is now much easier to use and more cost effective. And with the newly introduced Hopper with Sling, it will be built right into the set-top box. This gives the consumer the ability to access live and recorded content via mobile phones, tablets or PCs. We called this capability DISH Anywhere. Hopper with Sling was introduced last month with great fanfare at the Consumer Electronics Show in Las Vegas. In fact, it was voted Best of Show, but not without some controversy and intrigue. I guess that's just the price that you pay for standing up for the rights of consumers. At DISH, we are fanatics when it comes to giving customers their video content, what they want, when they want it and where they want it. And speaking of the consumer, we've also added the ability to watch shows on your mobile device even without an Internet connection. We call this feature Hopper Transfers. For instance, our customers can move their favorite recorded programming to their iPad and watch offline, on a plane, in a train or in an automobile. Now that's the real anywhere experience and only from the Hopper with Sling. The Hopper has several other consumer-friendly apps, including What's Hot, identifying the nation's most popular shows and the most-watched programs in your own ZIP Code; the Game Finder app, offering quick access to your favorite sporting events and teams; and DISH Explorer, the app that turns your iPad into both a remote control and information resource as a second screen. This is an exploding trend for 85% of the tablet owners, and it's changing the way customers discover and watch content. So DISH is redefining the in-home and out-of-home entertainment experience. As you saw in our 2012 SAC results, DISH has invested heavily in its brand with the lovable Boston Guys. Just last week, we kicked off a massive national communications campaign featuring our new generation Hopper with Sling product. We'll be running our ads on cable TV, radio, print, social media and billboards. This investment, coupled with our award-winning technology, deliver a solid one-two merchandising punch. In fact, DISH's top-of-mind visibility is up to 70%, an all-time high for us. Yes, we are leveraging this heightened awareness to grow high-value subscribers and to increase revenue in 2013. Now to give you all some details on our financial performance, here's our CFO, Robert Olson. Robert E. Olson: Thank you. As Joe noted, broadband activations increased significantly in the fourth quarter with the launch of our dishNET brand. Along with disclosing broadband subscriber results beginning with this 10-K filing, we also redefined our SAC and ARPU metrics. Previously, our SAC metric had included certain costs associated with broadband activations, but we only included pay-TV activations in the denominator of this metric. Historically, these broadband activation costs were immaterial. However, with the increase in broadband activations in the fourth quarter, this prior metric would have been distorted. Our new metric, pay-TV SAC, simply takes pay-TV activation cost for the period divided by pay-TV activations. Similarly, our new metric, pay-TV ARPU, now only includes pay-TV revenue and subscribers. The change from the prior metrics was relatively small for periods before the fourth quarter due to the lower broadband activation rate and subscriber base. We have provided prior period data for each quarter in 2012 and the full year 2011 in our 10-K filing. I'll spend a few minutes now going through our fourth quarter and full year 2012 results. Subscriber-related revenue grew by 0.8% in 2012 compared to 2011 and increased by 1.9% year-over-year in the fourth quarter due to the combination of increased pay-TV ARPU and higher average subscribers. Pay-TV ARPU was up 1% year-over-year in the fourth quarter, an increase by $0.60 relative to the same metric in the third quarter. As discussed in previous calls, pay-per-view revenue typically improves sequentially in the fourth quarter. Also, receiver revenue improved slightly quarter-over-quarter as the mix of Hopper receivers in our base is gradually increasing. For those of you who haven't had the time to thoroughly review our 10-K compared to prior filings, the new pay-TV ARPU metric is approximately $0.48 lower in 2011 and $0.52 lower through the first 9 months of 2012 when compared versus our prior ARPU metric. This difference simply reflects pulling broadband revenue out of the numerator of this calculation. Subscriber-related expenses increased by 6% in 2012 versus 2011. This increase was largely driven by higher programming expenses. The programming expense increase was due to contractual rate increases and was consistent with trends we have seen during the last few years. Cost of sales increased by 27% in 2012 compared to 2011, driven by the full year effect of the Blockbuster business. In the fourth quarter, cost of sales declined by 5% year-over-year due to Blockbuster store closures throughout the year. As Joe mentioned, we announced the closing of roughly 300 Blockbuster domestic stores in January. We analyzed profitability at the store level, and these stores were not able to reach acceptable levels of performance. We also announced in January that the Blockbuster operations in the United Kingdom entered into administration. As noted in our 8-K filing earlier this month, we recorded a $21 million charge to cost of sales and a $25 million charge in other income in the fourth quarter related to this decision. Pay-TV SAC for 2012 was $784 per activation, an increase of 1.8% versus 2011. The increase was largely due to higher advertising expenses associated with our Hopper introduction. Pay-TV SAC in the fourth quarter was $791, a slight sequential decline relative to second and third quarter. With the rollout of the Hopper with Sling receiver this month, we shifted some advertising spending in the fourth quarter into the first quarter, so we would expect some upward pressure on pay-TV SAC in the first quarter. Just to help everyone with the math, the new pay-TV SAC metric was $1 per activation lower in 2011 and $6 per activation lower through the first 9 months of 2012 when compared versus our prior SAC metric. This difference simply reflects pulling certain broadband activation costs out of the numerator for this calculation. Administrative expenses were impacted by the Blockbuster acquisition. For the full year 2012, G&A expenses were up 9.6% year-over-year. Just looking at the fourth quarter, G&A expenses declined 12.5% year-over-year, driven largely by domestic store closures throughout the year. Net income attributable to DISH Network was down 58% for the full year, primarily driven by the Voom litigation settlement, the reversal of certain accrued expenses associated with the TiVo litigation in 2011 and increases in programming expenses with no offsetting price increase to our customers. This same income measure was down 33% year-over-year in the fourth quarter, driven by the Blockbuster U.K. charge and programming expense increases. In the fourth quarter, we paid out approximately $700 million associated with the Voom litigation settlement and related agreements. As a result, our free cash flow in the quarter was negative $298 million. For the full year of 2012, we generated over $1 billion of free cash flow and over $1.7 billion excluding the Voom settlement. There were 3 major changes on the balance sheet versus last quarter. First, the Voom payment of $700 million was made on October 23, which eliminated the associated accrued expense on the balance sheet. Second, we issued $1.5 billion in debt on December 27. Finally, we paid a $1 per share dividend on December 28. Let me now turn it back to Joe before we start Q&A. Joseph P. Clayton: Thanks, Robert. Given our significant 2012 improvements in customer service, in branding, in operations and in award-winning product offerings, DISH is better positioned today than it was just one short year ago. Unquestionably, there is much more work to do. But we are committed to growing high-value subscribers, to increasing revenue and investing for long-term growth, and we look forward to communicating those results in 2013. So again, thanks for joining us today for our fourth quarter earnings call. Now we will open it up to your questions.

[Operator Instructions] Your first question comes from Phil Cusick with JPMorgan. Philip Cusick - JP Morgan Chase & Co, Research Division: I guess for Charlie, can you give us an idea first on wireless? How long do you think you can work on this before it gets down to the point where you walk away? And you've tried a number of avenues so far. It looks like you're doing some interesting things. But how long do you have before the timing of the build-out and the market opportunity fades? And then second on the H-Block, can you give us any thoughts on when you think that auction might happen? Charles W. Ergen: Okay. On the second part, H-Block, we don't have any insight. The FCC, I think, has indicated they'd like to get the H-Block auction done this year. I think that's what they have said publicly. Usually, things take a little longer. But this FCC's hit a lot of milestones that they've publicly said they've hit a lot of those. So they're the best people to ask for that. But I don't think -- I think the H-Block auction will happen for auction. It will be the next auction to happen. I think it will happen before the 700 megahertz. And so it's probably the next one to happen. In terms of -- we have 7 years to build out, so we're -- and we don't think the value of our spectrum goes down. So I think the focus for the next year will be to figure out what the best path for us with our preference being to partner with somebody that's in the business today. So that -- and we have plenty of time to do that and make the right decisions and so forth. The trick is not to lose a lot of money while you're trying to make the long-term strategic call. Philip Cusick - JP Morgan Chase & Co, Research Division: So plenty of time? Charles W. Ergen: So obviously, I mean, I'd say this, I think the way the industry is framed right now, you've got several -- while we were in the FCC review process, obviously, a lot of the dance partners, big partners, right? And so those are all coming up with shareholder votes in the next 3 or 4 months, right? So by the time you get to say, June, you probably had 3 or 4 shareholder votes out there. That will give us a better indication of what the landscape is.

Your next question comes from the line of Marci Ryvicker with Wells Fargo. Marci Ryvicker - Wells Fargo Securities, LLC, Research Division: I have 2 questions. The first is just a numbers question for Robert, and then I have a strategic question for Charlie. So first, on the number side. Robert, do you have the total SAC number for the fourth quarter? I know the $791 is for pay-TV. Do you either have a consolidated number or a broadband-only number? And then with the strategic question, Charlie, last time you were in front of us, you mentioned that within 30 days of receiving the NPRM, that you would reveal your wireless plans. And I think we keep hearing from all these public outlets that your biggest plan is to partner with somebody. Is there more that you can reveal to us? I feel like people are waiting for some sort of announcement maybe on this call. Or are you just happy enough telling us that you, first and foremost, want to partner with somebody? Robert E. Olson: So Marci, I'll take the first question. Included within our total subscriber acquisition cost is $27 million of operating expense related to broadband in the fourth quarter and about $10 million of capital related to broadband in the fourth quarter. This historically was a much lower number. In fact, if you go back to fourth quarter last year, the operating expense for broadband acquisition cost was under $1 million. Charles W. Ergen: But that includes wireline and satellite. Robert E. Olson: The fourth quarter number includes both satellite and wireline acquisitions. And then Marci, your second question... Charles W. Ergen: Oh, I think the second question is for me. This is Charlie. Yes, so strategically, where we stand now, first, the FCC has -- we don't formally have our license, which we hope to get next month. And we think by the end -- we still have to go -- we're back to what's called a 3GPP process because our power levels were changed on the lower S-band by the FCC. So we have to go back to the 3GPP process and get that change done, which is actually going fairly smoothly. And we think that we'd get that done by the end of March. So by the end of March, we'd probably have kind of our license and we kind of know 3GPP standard that we can move forward. And at that point in time we'll start building. We're already building chipsets, and we'll start building radio, so that we can start testing our system. And we hope to be able to test something by late this year. We're also building out our 700-megahertz license. We're in the process of testing that as well, and we'll add more sites to do that. We won't spend a huge amount of money in doing that, but we'll at least make sure that all our technology works. So that when we're prepared to move forward very aggressively, we've got the system in place to do that. Strategically, certainly, our first preference is a partner. Now what have we done? We put that -- we put our first preference on the table. We've made an actionable offer to the Clearwire board Special Committee, which provides a superior offer to the shareholders of $3.30 a share versus the Sprint offer of $2.97. It would have us acquiring 40 megahertz of spectrum nationwide. Were that -- when -- a couple things will happen, right? One is, that's probably a pretty good deal for Clearwire shareholders. It's clearly a better deal than what Sprint has offered. It's probably a pretty good deal for Clearwire because they get much needed capital of a minimum of -- over $2.5 billion in capital, maybe a little bit more. And it's not a bad deal for Sprint because they end up with a lot of capital to help their build-out, particularly in Clearwire. And that would mean that Sprint would be the most likely -- if that transaction went through, Sprint's your most likely partner. The reverse of that is, is that, that offer is not accepted or there's a bidding war for Clearwire, right? And were we to lose that bidding war or if we were not to prevail for our offer for Clearwire, then Sprint's probably not a likely partner. And so we kind of have to wait and see how that plays out. And so that's strategically the first kind of place that I think we have shown a direction we'd like to go, and that was even before we got our spectrum. So I think that -- and so we have to wait and see how that plays out. And then if for some reason, Clearwire is not an option for us because that's just the way the circumstances go, then we think we have other alternatives.

Your next question comes from the line of Doug Mitchelson with Deutsche Bank. Douglas D. Mitchelson - Deutsche Bank AG, Research Division: Two questions, the first for Charlie and Joe. Your Disney renewal is up later this year. I think you've got 2 separate lawsuits with Disney right now, maybe there's more. I guess that's probably a pretty normal number anyways. But are you concerned that Disney will refuse to license ABC to you if you will not disable the Hopper? And any other issues with the renewal that we should think about? And then I'll ask my second question afterwards. Charles W. Ergen: You take it, and I'll follow up. Joseph P. Clayton: Okay. Yes, we do have a renewal with Disney. We are a big customer of Disney's. I would not expect them to take it down with the AutoHop as the reason. That being said, anything can happen. But normally, greed prevails, and there'll be a discussion, and it'll be a win-win for both companies. And that's a general statement. What do you think? Charles W. Ergen: Well, I mean, I think obviously we're a very large customer of Disney, and our checks are pretty big. So obviously, to the extent that we've had -- we have negotiations every year with major programmers, we -- some that we're in litigation with, while we have contracts going on. And we've always been able to work through those issues. Because ultimately, content going down is a lose-lose for both us and the content provider. Particularly in Disney's case because the model would be materially changed if customers weren't -- as you know, sports programming is the most expensive cost, and it's virtually every package that pay-TV providers offer. So the model could change, which would not be -- it may not be a real -- may not be a bad problem for us long term, but probably would be a short-term problem. That certainly would be a long-term problem for Disney. So I would expect that both companies will find a workable solution. That's certainly how we would approach it. The AutoHop feature is a broader question, which is again, I think we're a bit misunderstood on that in the sense that we see the advertising model changing. We see with the advent of the Internet and the way you can target commercials, we think we can't, as an industry, stay -- put our head in the sand to that. With DVRs, all models of DVRs, all pay-TV providers skip commercials, customers skip commercials. We can't ignore that fact. The way -- what we're really saying is, to the broadcasters is, there's a way for you to not put your head in the sand. There's a way for you to certainly I believe make more money than you make today from DVRs, from advertising. And the way to do that is to target the commercials and to work with us, not against us, and we'll help show you how to do that. And so that's -- I personally believe that, that's the -- that as those discussions go on, that we can show the broadcasters that we're not foe, we're friend. And that the advertising model can work for both the consumer -- for the content owner and for the distributor. So that's really where I'm focused. It doesn't mean that everybody will accept that. It doesn't mean that some people just go -- doesn't mean that some people are averse to change, but the advertising model is going to change with or without the Hopper. Douglas D. Mitchelson - Deutsche Bank AG, Research Division: Right. And a quick follow-up on comments you already made for, I guess, Charlie, you and Tom, if he wants to chip in. You said you have plenty of time to make decisions on wireless. I mean, can you give us a sense of what kind of time frame you're thinking of? I mean, you could wait 6 years before you have to build out the 70 megahertz -- to 70% of the country. So is the time frame sort of measured in you have years to sort this out versus months? And then you mentioned the possibility of a Clearwire bidding war. So you're on one end of that. Are you ready to get into a bidding war on Clearwire? Charles W. Ergen: Well, those are loaded questions. We have 2 build-out schedules. One is I think on the S-band, I think we have 7 years from whenever our license gets approved, and it isn't formally approved yet. Thomas A. Cullen: Correct. Charles W. Ergen: Okay. Thomas A. Cullen: The interim build-out requirement as well. Charles W. Ergen: But you don't have to meet the interim? Thomas A. Cullen: Right. Charles W. Ergen: There's interim requirement, but you don't have to meet the interim requirement. There's a final requirement. I think it's 7 years. On the 700 megahertz, we have an interim requirement, potential requirement of June. If you don't hit that interim requirement, you have additional time to build out, which I think is another 3? Thomas A. Cullen: 4. Charles W. Ergen: Another 4 years. So the -- and so that's where we'll head on the 700 megahertz. The technology is changing. And so it doesn't make sense to -- we don't want to get in a situation where -- I mean, I think as a Monday morning quarterback, and I think Clearwire would probably agree with this, that they probably made a mistake to go WiMAX. They saw that the LTE was around the corner, but they wanted to be first, and so they went with WiMAX. And in hindsight, right, probably should have just waited for LTE and built their network out in LTE, right? That would have -- even though you guys would have said, "What are you doing? What are you doing? What are you doing?" and put a lot of pressure on them, that was probably the -- that might not have been the best long-term decision. We don't want to be in that. We want to be in the -- make sure we're making the right long-term decisions. And so there are technology breakthroughs that happen every year in this industry, and timing is important. And you want to hit with the right technology breakthrough based on the timing of your license. In our case, now that our license is assured, now it's the timing of, how other people are building out and who we might work with. So we have -- look, the big picture is, we have a mature business in video today, as do our competitors, right? Cable guys have a path on broadband to accelerate the revenue and margins on broadband as people use more and more broadband and more and more data. And we've taken a strategic choice to put ourselves in position to expand our business on the wireless side. So I like where we are strategically. There's lots of unknowns out there obviously. We're not going to give you our strategy. I forget what the question was. We're not going to give you all the inside playbook because if you play poker, you don't do very well when you show everybody else your cards. It's really, really hard to win that way. Most people don't show their cards until all the money is down. Then there's a winner and there's a loser.

Your next question comes from the line of Ben Swinburne with Morgan Stanley. Benjamin Swinburne - Morgan Stanley, Research Division: I guess 2 questions. Joe, you mentioned mobile video and consumers racing to mobile video. And if you look at the TV Everywhere trends in the industry, it's definitely a big reason for Comcast and Time Warner Cable seeing kind of 10% to 12%, 13% programming cost growth because they're acquiring out-of-home rights through their contract renewals, including the likes of Disney. Is DISH prepared to spend that kind of money to build out its out-of-home rights portfolio? Or do you think Sling allows you with an elegant way around that problem? And then Charlie, just to come back to Clearwire again. I guess where I get confused is when I look at the Sprint Clearwire shareholder agreement, there just seems to be things that makes the offer you've made very difficult, if not impossible, for the board or at least Sprint to support. And it seems like you would need Sprint's support to get this deal done. Isn't Sprint going to be down spectrum if your offer goes through versus what Sprint's proposing? And if that's the case, why would Sprint agree to it? Maybe you can flesh that out for us, since you mentioned before you thought it was a pretty good deal for them. Charles W. Ergen: Yes, I'll take your -- last part of your question first. Clearwire has basically 160 megahertz of spectrum nationwide. We're offering to buy -- our offer is to buy 40 megahertz, so about 25% of that spectrum. So Sprint would still have plenty of spectrum. And I would contend that the FCC is not likely -- that a foreign company owning that swathe of spectrum, 160 megahertz, which is the only technically TDD spectrum that we have in the United States. And given that data is more important, that would be a very strategic asset that -- and based on spectrum caps, that would put a Japanese company in a situation of owning more spectrum in the United States than AT&T or Verizon. And so I would contend that when the FCC looks at that, that they'll look as to whether a foreign company should be able to own that amount of spectrum, plus all the spectrum that Sprint owns today. So I think there's going to be issues with the 100 -- that spectrum anyway. The second thing is, I believe that we have a -- we have an actionable item in front of the Clearwire board today. The only reason it wouldn't be actionable is if Sprint really controls Clearwire. Now if Sprint controls Clearwire or Clearwire -- I have yet to see any -- then shareholders got misled, right, by both Clearwire and Sprint. And the FCC's been misled because there'll be a change in control that took place that nobody knew about, right? So I don't think that Sprint -- at least Sprint has contended in their public filings that they don't control Clearwire. If they don't control Clearwire, then obviously we have an actionable -- yes, it really means that -- it means that if Sprint -- if our offer's illusionary, as Sprint said, then Clearwire sold to Sprint long ago, just nobody knew about it. They didn't tell anybody. And so, boy, that's whole different set of issues and that would get messy. So I think it's an interesting -- I think when people rationally look at it, right, $3.30 is better than $2.97. And shareholders normally, in most cases, get the higher value, right? So we'll see what happens and -- but we're serious. We're playing to win. We like the Sprint -- we think that the Clearwire offer we have is a fair offer, and we think strategic to us, and we think it's good. We also think it's probably good for Sprint and Clearwire, but they may have different opinions. We don't control that. Joseph P. Clayton: All right, Ben, in regard to the first question, in terms of the rights, I think you used the right word. I think we do have an elegant solution in providing content on a mobile basis. And why should the consumer have to pay twice what he's already paid for that he's using in the home? So it's a matter of just shifting the -- using technology once again to provide the same experience that he has in the home on his -- via a tablet, a PC or a mobile phone. So we think we have a significant competitive advantage here over our competition.

Your next question comes from the line of Bryan Kraft with Evercore Partners. Bryan D. Kraft - Evercore Partners Inc., Research Division: Just had 2 questions. One, if you look at the gross adds in the fourth quarter, I think they were flat year-over-year after being up pretty significantly in the second and third quarter. So I just was wondering what was behind that change. And then also can you talk about how you're seeing the price increases being received by the customer base, and what you might be expecting in terms of a churn reaction in the first quarter? Joseph P. Clayton: I'll take the last one first, Brian. In terms of the price increase, I have to say so far, so good. But we're really not going to get a real good barometer on this until the March, April time period when we're through one cycle of the payments, of their billing cycle. But so far, I'd say it's going according to plan. Robert E. Olson: And Bryan, this is Robert. I'll take your first question on gross adds. Yes, it was a little bit lighter in fourth quarter. We knew the Hopper with Sling would be launched this quarter. And so I mentioned in my opening remarks that we went a little bit lighter on advertising spending in the fourth quarter with the thought that we would promote heavily our Hopper with Sling this quarter. Joseph P. Clayton: Yes, right or wrong, we pulled back on advertising with the election and into the Christmas selling season because we weren't sure we could get above the clutter. And of course, the costs were prohibitive, so I guess we saved a little dry powder for the first quarter. Bryan D. Kraft - Evercore Partners Inc., Research Division: Okay. Can I also ask quickly, did the AMC dispute end up having, do you think, any discernible impact on your churn or gross adds in the early part of the quarter? Robert E. Olson: Bryan, this is Robert again. I think it had a small impact because remember that, that dispute wasn't settled until mid-October. So I think it had a small impact on fourth quarter.

Your next question comes from the line of Amy Yong with Macquarie. Amy Yong - Macquarie Research: Looks like you made a nice return in marketable securities. Can you comment if this is Clearwire? And if it is, how do you think about this investment versus your bid for Clearwire? And also, Charlie, I guess you've made in the past a distinction between urban and nonurban areas. Do you feel like your spectrum is better utilized in either market? Or do you think it's better utilized for a nationwide network? Robert E. Olson: So Amy, this is Robert. With regard to your first question, we don't provide the details of our marketable securities. And we've given some color in our 10-K on the fair value of those securities, but we don't provide the details. And I'll turn the second question over to Charlie. Charles W. Ergen: Yes, well, the way I look at it, we're $700 million down on Voom, and we made a couple of hundred million in marketable securities, so we're still stupid. So -- but we're not -- we're less stupid today than we were 3 months ago, I guess. In terms of spectrum, it -- it's -- in general, the frequencies that we have and even the Clearwire is obviously a much better -- is much better for an urban, densely populated area because it doesn't propagate very far. So it's a less attractive from a rural point of view. That's just a general statement, and that doesn't mean you couldn't be creative. But in general, spectrum in a small town is not as valuable as spectrum in the city because in a small town, even if everybody was on their phone at one time, you don't need a lot of spectrum. And so small towns, you typically would want a lower frequency so that you can -- your build-out costs are less and you propagate farther, right? The reverse of that in cities, the low band spectrum, you can't reuse it as much, and so it has less capacity in total. And our frequency has great value in cities because you can reuse it very efficiently, and it's got pretty good prop. It's got middle-of-the-road propagation characteristics, so it's a pretty good sweet spot for spectrum. But I would say, in general, there's a lot of variables in spectrum. And it's a long-winded -- it's much more than a 30-second answer as to why you would do one thing or another.

Your next question comes from the line of Jaison Blair with Telsey Advisory. Jaison T. Blair - Telsey Advisory Group LLC: As a follow-up on Amy's question, the conventional wisdom is it'll take $20 billion to $30 billion or more to build out a wireless broadband network, which in itself is a meaningful barrier to entry, plus you have the issues of getting to scale in chipsets. Is there an alternative where you could build out a lower cost -- build out for a lower cost, like could you build out a limited network to offer only stationary broadband that you would cross-sell to your subscriber base and not offer a mobile broadband network from day 1? Or are there nontraditional partners that probably make sense? Charles W. Ergen: Well, I'd probably disagree with your first statement. I don't know that it costs 20 -- I think people have spent $20 billion or $30 billion or even more to build out networks, but I don't believe that it would necessarily mean that's the goal. Jaison T. Blair - Telsey Advisory Group LLC: I think that's the conventional wisdom. Charles W. Ergen: Yes. Well, I would say it differently. If you were to build out a 2G, a 3G, EDGE network, it would cost you that kind of numbers or more. But obviously, the world has moved to LTE and if you were to build an LTE-only network, you can -- towers exist already, people share towers, so your costs are less. There's backhaul that you can share, a lot of towers, so the costs are less, potentially less there. Small cells can be done at a fraction of the cost of macro cells, so your build-out costs can be materially less than that. To your second part of it, there are some reasons why you might use some of your spectrum for fixed broadband as an example. And that's materially less build-out cost. And so when we -- as we test, I think you'll see us test a lot of different uses of our spectrum and kind of see where it comes down. We have some ideas where we think it's going to fall. The best and the most profitable use is going to be for mobile, data, voice and video. But there's probably some areas where it makes sense in a fixed basis as well. The general answer, we'll prove that out to ourselves by testing it. Jaison T. Blair - Telsey Advisory Group LLC: And then can you just give us a sense of the pre-SAC margin contribution of the dishNET broadband service, and what might be a reasonable penetration rate of your sub base? Robert E. Olson: Jaison, this is Robert. We look at the broadband long-term economics being pretty similar to the pay-TV economics on a per subscriber basis. In general, broadband SAC is slightly lower than pay-TV. Also broadband ARPU is slightly lower than pay-TV. But when we look at the overall economic return of a broadband subscriber, we expect it to be in the same range as pay-TV. With regard to the potential market, I think it's still pretty early to say how big that potential market is. However, we had great results in the fourth quarter with the launch of dishNET. First quarter, we're seeing the same thing. So we're pretty excited about this product. Joseph P. Clayton: You know how much the demand is when you see if ViaSat or Hughes invested in another satellite.

Your next question comes from the line of Vijay Jayant with ISI. Vijay A. Jayant - ISI Group Inc., Research Division: I have 2 questions, just following up on the broadband story. So you're wholesaling from, I think, ViaSat and EchoStar for the service. So your economics in your P&L are retail economics? Or is there -- can you sort of walk us through what sort of flows through your numbers and what -- if you can help us in what sort of goes to the actual owner of the satellite and the network? And second, I just want to know what the total wireless-related setup costs were in 2012. Robert E. Olson: All right. Vijay, this is Robert. I'll take the first broadband question, then I think I'm going to have to get you to repeat your second question. But we are essentially the owner of the customer. We bill the customer. We provide customer service, and we do pay a wholesale fee to either ViaSat or to Hughes, which is owned by EchoStar, or to CenturyLink, the wireline option that we've described in our 10-K filing. But it is our customer. We incur the SAC, we incur the revenue. The way I think about it is, versus the pay-TV business where you're paying programmers a certain amount of money each month, we're just paying the satellite provider a certain amount of money each month. Fortunately, we pay the satellite provider less than we provide -- than we pay the programmers. And so Vijay, could you repeat your second question? Vijay A. Jayant - ISI Group Inc., Research Division: I just want to know what was the total cost on your wireless initiatives, the setup costs in 2012. Robert E. Olson: Very, very small in terms of hard costs associated with our wireless spectrum. We break out the wireless spectrum as a separate segment. However, most of the costs for that segment are depreciation and amortization. Charles W. Ergen: I mean, it's fair to say the biggest costs are TerreStar and G1 satellites, right? Robert E. Olson: The depreciation of it does. We have some very modest cost to just run the satellites, just to operate the satellites.

Your next question comes from the line of Tuna Amobi with S&P Capital. Tuna N. Amobi - S&P Equity Research: I guess first, some quick questions for Robert. On the free cash flow line, can you give us an idea of some potential factors that could affect your outlook this year? Any kind of working capital issues, cash taxes, et cetera? That sort of thing. And on P&L for Hooper, I'm sorry, for Hopper DVR, I was wondering if you're planning any major outlay for upgrade of existing subscribers or are your efforts mostly focused on new subscribers? Any color there would helpful. And then for Charlie, your recent comments seem to suggest that cord cutting is actually going to accelerate or at least is here to stay. And I think you suggested potentially that a la carte maybe -- provide some kind of solution for that. So I'm wondering if you see that kind of viewpoint getting traction over the next year? Or is it something that you intend to actively kind of propagate or are you just kind of expressing some general thoughts? So any color there would be helpful. Robert E. Olson: Tuna, this is Robert. I'll start with your question on free cash flow. Generally, we think for 2013 that free cash flow will be at or slightly better than net income for the year. You might have noticed that Washington extended the bonus depreciation for one more year, so there's 50% bonus depreciation. That clearly helps us on the cash tax side. The other element that will help us in 2013 on the cash tax side is that we reached a settlement, the Voom settlement in October. We reached that after we had paid our quarterly tax payment on September 15. As a result, our normally scheduled April 15 tax payment will be far lower this year. So those will all help free cash flow. And as I said, probably free cash flow would be at or slightly better than net income for the year. With regard to upgrades, we provide upgrades to customers, existing customers as they request. The cost of those upgrades range from being free to some cost, depending on how long the customer has been a DISH customer. We've seen pretty good demand. Retention expense in the fourth quarter was up slightly year-over-year. And we think there'll be pretty good demand throughout 2013 for the Hopper product. Offsetting those costs, however, we see far less just normal HD upgrade. Because a greater and greater percentage of our base has MPEG-4 receivers relative to what it was a few years ago. And your third question was on cord cutting to Charlie? Charles W. Ergen: Yes, I mean, I've been more outspoken about the issue than probably anybody in the pay-TV industry. I think cord cutting is going to -- is here to stay and will accelerate over time as monthly fees -- as people pay $1,000, $1,200, $1,500 a year for TV and they have other alternatives. And one of the problems is that the video is available on the Internet. It may be a day later, it may be -- right? It may have less commercials or no commercials. And it comes in more of an a la carte form where you can kind of pick and choose. And so a lot -- the younger generation a lot of times just sits down to watch something to entertain them and it's not always network TV or cable channels anymore. It can be anything from Amazon, to Netflix, to YouTube, to whatever else they search for. So I think -- that's why I think we have a -- our core business is a mature business. And that's why we 4 years ago decided to transform and to take advantage of some of those trends that we saw that are happening. And history will judge it 5 years from now whether that was a good decision or a bad decision. But that's the path we're on because we think that's the right path. Tuna N. Amobi - S&P Equity Research: Okay. That's very helpful. Just a quick clarification, Charlie, on the earlier remarks that you made about a Clearwire deal. I think you said that if DISH does not prevail, then that wouldn't be -- then Sprint would not be an option. So I'm wondering if part of your strategy might contemplate some kind of middle ground where perhaps you and Sprint can work out some kind of middle compromise solution or do you see this pretty much as an either-or situation? Charles W. Ergen: Well, again, I could be naïve. But based on the situation that I believe Sprint was in, and I believe Clearwire was in, I think we solved a lot of problems for both those companies. One is, we made a -- we have a superior offer in terms of -- to the shareholders. And second was we offloaded a lot of their build-out costs by acquiring spectrum that may have to be jettisoned by the FCC anyway. And the third thing is, Sprint and DISH match up pretty well in terms of where our spectrum is, right? Obviously, the H-Block, it was a big fight that Sprint ultimately prevailed on, but that's a spectrum that adjoins both of our spectrums -- or a band that adjoins both of our spectrums. So we match up pretty well. And then Sprint has publicly talked about their network vision, which is to build out a network that can be shared by other people, which obviously would reduce our build-out cost, right? So that seemed pretty logical to me, right? Sprint then took the opinion, right, that our offer was illusionary and didn't think that Clearwire could actually execute on it, right? And so that's where they -- that's where they've been publicly today. If that's the path that they ultimately go down, right, we would say 2 things. One is, we do have an offer that's executable by Clearwire, unless Clearwire sold the company without telling anybody, then I might change my mind. But I don't think they did that. So the next move is for Sprint to make the move. And Sprint will have to decide, and the Clearwire board will have to decide. And that will kind of send us one direction or another, right? But you can't -- that's the way it goes in life, right? You get to a fork in the road and you're going to wait for the sign to change to tell you which way to go. And we're -- and DISH is in the fork in the road. And we have multiple paths to go depending on decisions that other people make. And the final part of that is obviously the federal government and the FCC make decisions, right? And they pick winners and losers, right? And that's even harder to predict. And obviously, they pick Sprint as the winner, they pick -- in the H-Block proceeding, they picked Sprint as a winner and DISH as a loser, right, in that particular, specific instance, right? And so as these mergers and partnerships and all these things go through, the FCC will weigh in. And ultimately, the FCC is going to signal to us that we want -- that "Yes, we want DISH in the business," or "No, we don't care if you're in the business or not." If they signal to us that they don't care if we're in the business or not, then obviously selling the spectrum becomes more of a reality. If the FCC signals to us that they want us in the business, then nobody will try harder to get in this business than we will. So you can see that -- so what do you do as management, you put yourself in position that no matter what the FCC decides or no matter what Clearwire decides or what Sprint SoftBank decide or whatever, that you then believe you have other alternatives that are good for your shareholders to take place. You have preferences of the direction you'd like to see it go, that you think are best for your shareholders. But you don't always get what you want in life, it doesn't always work out the same way. And then you have to have the tenacity and the flexibility and the confidence in your team that when something changes, you can change with it, right? And my experience has been that there's been deals that I wish we could have gotten that didn't happen. And 3 years later, I'm sitting here saying, "I'm glad that deal didn't happen, right? Thank God that deal didn't happen". And sometimes there's been deals that -- we wish we had got Sirius radio, right? That deal didn't happen. I've wished that -- I'm sitting here 3 years later, I wished that deal would have happened, right? So sometimes, you lose. But one thing I'm sure of, you can't win unless you get in the arena. And we're a company that gets in the arena, rightly or wrongly, and sometimes we lose.

Your next question comes from the line of Matthew Harrigan with Wunderlich Securities. Matthew J. Harrigan - Wunderlich Securities Inc., Research Division: When you look at a couple of people who've deployed LTE-Advanced networks, I think, Yota outside Moscow, what lessons are you inferring from that in terms of waiting on the technology on the small cell or femto cell side and just the consumer proposition, and even if you did decide that the FCC was very friendly, but you really did have to go it alone, the plausibility of taking a graduated approach and doing it without -- trying to bootstrap without a partner? And then secondly, could you provide a little bit more color on how EchoStar might layer into your strategies, in terms of having sufficient scale and all that? Charles W. Ergen: Well, look, I'm not going to say that I'm the world's expert on wireless, and people who are deploying LTE networks are more knowledgeable than I am. But the Mobile World Congress is next week in Barcelona, where you get to see -- kind of talk to everybody in the world who's done that, so we'll learn a lot next week. And there's different developments in LTE. There's different revisions that are coming. So every year, LTE gets better and better and better, whether it be heterogeneous networks or whether it be carrier aggregation or so forth and so on. So there's a lot of things that are happening, whether it be Voice over LTE or VoLTE. So those things are all happening. We spend our time traveling around the world looking at those things, talking to people, learning the lessons learned, trying to -- when I don't know something, when we don't know something, the best thing is to go talk to people who do know, right? And that's what we're doing. As opposed to "Let's experiment and just blow a bunch of money," it's, "Who's built the best LTE network in the world? Who's built the worst LTE network in the world? Let's go see them. What did you do right? What did you do wrong?" Right? And that's the approach -- we did it in DBS, we didn't -- we never launched a satellite. We never built a set-top box. We never billed a customer, we never -- we had to go learn those things, and we learned from people who had done it, right? So the Hubbards had done it in DBS and DIRECTV had done it in DBS. We learned from them, right? So that's how we'll do it here. We are very ignorant on the industry, but we're going to be right up there with the best in the world by the time we're done. Matthew J. Harrigan - Wunderlich Securities Inc., Research Division: And are you fairly joined at the hip with EchoStar in all this? Charles W. Ergen: No, EchoStar is obviously a separate corporation. And there are things that from a technology point of view where we -- where one of the things we're going to do is make a link to the satellite, so no matter where you are in the United States, you can always make a text, potentially a phone call by using our satellite technology. That technology, EchoStar invented that technology in terms of how you reach the satellite and they were the primary vendor for TerreStar and DBSD. And so all things being equal, we certainly would continue to use them for technology things where they're the leading expert, right? It's possible from a backhaul perspective if you get in a rural area and there's no fiber and no microwave that you could use a satellite for backhaul, right, which they have, a broadband backhaul satellite. So there are ways that we might use EchoStar, but it would be an arm's-length transaction where we believe they are the best vendor for us. They certainly have some talent in this area.

Tracy, I think we've used up our time on the analyst portion of the call. And if you want to open up the lines to the press, we can start that. Joseph P. Clayton: We will thank the financial community for joining the call today. And now, we still have some time for questions from the members of the media.

At this time, we will now take questions from the media. [Operator Instructions] Your first question comes from the line of Alex Sherman from Bloomberg.

Charlie, I wanted to know if you can just sort of help me walk through what would happen if you guys can't reach some sort of deal with Clearwire and Sprint. Based on what we've talked about in the past and what you've said, you've said that you would be willing to put a for-sale sign at that point on the spectrum. But given your long-term strategy, if you sell the spectrum, then you just end up where you are now, albeit a little bit richer. And I'm wondering, does that mean that you would consider selling the entire company if you can't get a deal done on the wireless? Charles W. Ergen: First, I got to correct you. Whether we prevail at Clearwire or not is -- if we were not to prevail at Clearwire, I have never said we would put a for-sale sign on for the spectrum, right? We believe there's other things we could do in that situation in this industry without selling our spectrum. So we don't think Clearwire is the only alternative for us. We just think that given the lay of the land today, we believe that's the best option for us today. So that's the first thing. The second thing is, there's a wide variety of things that we would do strategically regardless because we're primarily a video customer, and we think the biggest mobile use in the future is going to be data and the biggest use of data is going to be video. So we think we're well positioned there, and we think that we have assets to make that product better for somebody out there that wants to partner. And then my preference, look, we have a Board of Directors, and we're a public company. And anybody can make an offer to our Board of Directors tomorrow, and our board would consider it, right? And that's for anything, whether it be assets or the company, right? And from a practical point of view, that's difficult with the large majority position that I have. But we still are responsive first and foremost -- we run this company for the shareholders and for our employees and for our customers. And we have fiduciary responsibility. So -- we never say never to anything. But we haven't gone and hired a banker -- we haven't got a banker and put the for-sale sign out there. I think the press picked up on, it is -- it is not our preference to sell the spectrum. It is our preference to get in this business and expand our business. We think that's the best long-term return for our shareholders. And that's everything, every day we wake up, that's what we're trying to do.

So just to clarify, Charlie... Charles W. Ergen: And you read about Clearwire because that's in the paper because we made a public offer. Some of the things that we do, you don't read about.

If Clearwire doesn't go through, what you're saying is, there is another option with an existing wireless company that you guys would potentially pursue? Charles W. Ergen: What I'm saying is, we think we have other options.

Your next question comes from the line of Shalini Ramachandran with Wall Street Journal.

Hey, Charlie, hey, Joe. I just want to ask you guys 2 quick things. One, we and others have reported about DISH's interest in the smaller Internet TV offering separate from the pay-TV bundle. And know that you guys have tried to pursue that in some way. But who do you have programming agreements with so far for that venture? And if you do have some, when do you plan to launch it? Charles W. Ergen: This is Charlie. I'll turn this over to Joe in a second. But we've looked at whether -- we see the industry where people's content goes to other people on the Internet. And so we've looked at that and said, "Is that something that programmers want to do?" That's not necessarily in our best interest. We're not -- that competes with what we do in the ecosystem that's out there today, right? But if people are going to do it, right, then we certainly want to be able to participate. That doesn't seem to be -- this is my opinion. That doesn't seem to be a path that the major programmers want to go down. I think that at least for the foreseeable future, programmers are doing 2 things. One is, they're primarily staying within the distributors who have an investment in their distribution system, right? So Internet, if you're an Internet provider, you don't have any investment in the actual Internet, right? Whereas we have satellites and cable has plant equipment they have to build. So it doesn't -- and the second thing is, they've gone to a different -- a little bit different route, which is called authentication, which is where if you are already a paying subscriber, you can get your content in the home and maybe outside of the home if you're authenticated, which is a very rational way to do it. That's what ESPN does. There was a question earlier on that with WatchESPN. If you're Time Warner, which I think they've signed a contract with recently, then you can watch ESPN outside your home by going to their application. So that's another way of doing it that does it. So we looked at it and said, "If you're go to do something different, we want to participate. But we're not encouraging you to do something different." Right?

Right. Got you. Joseph P. Clayton: Let me just try to take a consumer standpoint. We believe there's a market, mostly 18- to 28-year-olds that we're missing today in the pay-TV industry. They're not going to pay $100 per month for content, and they're not going to watch 250 channels. And most likely, they're not going to watch it on a 60-inch flat panel display. But they may pay let's say, $20 -- about $10 to $20. They may watch 20 channels, and they most certainly will watch it on their mobile phone, on their tablets and on their PCs. So it's a market that I believe, down the road, has a compelling interest not only for us, but for the programmers, especially as the pay-TV market matures going forward.

Do you think that there's opportunity to get the smaller programmers that are starting to get kicked off of the big pay-TV bundles by guys like Time Warner Cable, is there an opportunity for those guys to become part of some sort of an Internet TV offering? Charles W. Ergen: You probably can get those -- this is Charlie. You probably can get those customers, but the reason they're getting kicked off is that people aren't watching them. So it doesn't really do you a lot of good to put something on that nobody's watching and then get people to try to pay for it, right? So it's a Catch-22 for those programmers, which is they lose their distribution. And they don't have enough critical mass to justify -- they don't need us to go a la carte on the Internet, right? They could do that themselves. So I think you've got 5 major content providers. Those content providers seem to be relatively content within the existing infrastructure where distributors are paid a lot of capital to get things to consumers and where most things are bundled together, right? So it's not an a la carte environment. They are experimenting with -- which is the risk to us, our industry, to distributors, they're experimenting with selling rights to Amazon or YouTube or Netflix that reduce the value of their content to some degree in the traditional infrastructure because you can wait and watch it later, right? So you can wait and watch Mad Men or Walking Dead and get from Apple iTunes and get it the next day or whatever it is, right? So do you really have to watch it on Sunday night? And so that devalues the value on Sunday night, but when you add the Sunday night value plus the Monday value on iTunes, maybe it's a better deal for the content providers. So they're experimenting with that, and we're just -- we have to be prepared as a company that if it moves that direction, that we can move with it, right? That's all. Look, you got -- I've said this many times. You can fight change or you can embrace change, right? And as painful as it is sometimes, this is a company that will embrace change because we believe that's the best long-term strategy.

Got you. All right. But nothing in the near future, though, with this Internet TV venture? Charles W. Ergen: We have no announcements today. But if you know somebody else, we'll read about it in The Wall Street Journal tomorrow if you got somebody else who is.

Your next question comes from the line of Liana Baker with Thomson Reuters.

This is a question for Charlie. Nice to finally speak with you. You've been characterized as a bit of a disruptor, especially lately with the ad-skipping features on the Hopper. And you also recently called the over-the-top service Aereo genius. So I was wondering if you'd consider buying Aereo and freaking everyone else out in the industry. Charles W. Ergen: I don't think we're going to buy Aereo, but I never say never, right? But I think that they've got their own -- that's not an issue that I would pursue with the broadcasters because we do get retransmission consent from the broadcasters. And so we go with it. We do that within the system today, and I admire what Aereo has done as a disruptor, and we'll wait and see how that legal thing all takes out. I think they've got a really good idea and so forth. But my gut feel is ultimately, broadcasters could do that themselves. If Aereo was legal, they could -- broadcasters could ultimately do that themselves. And then that becomes very difficult from an Aereo perspective to compete against the content owners themselves. So and I don't think we're a disruptor so much. I think that's probably a bit of a misnomer in the sense that I think we're real. And I think we just see -- I think we see change that is going to happen, right? And when we see change is going to happen, we try to get in front of it and see if we can participate in the change and help make the rules of the change, and then ultimately our shareholders benefit from the change, right? So if you're sitting here looking at the U.S. government, what do we know? We know that the U.S. government has got to cut spending, and we know they got to raise revenue, right? So you can listen to both sides of the aisle talking on TV, but why waste your time? That's what's going to happen, right? That is what's going to happen. So we see advertising changing. So why would we act like things are the same? Because they're not. So we would change it and make it more productive and make it more targeted and hopefully make more money at it, and make it better for the consumer. So that's just the way we operate.

Because you talked about deals that you regret, like Sirius and -- so maybe looking -- in a few years, looking back at Aereo, would you maybe not regret that or... Charles W. Ergen: Well, look, I -- I don't regret Sirius. We got outbid, right? So we lost the deal. I'm proud that we participated. I'm proud that our corporate development team was smart enough to see an opportunity. And we did, we were rewarded financially, just not as much as Liberty by about -- we were about $10 billion short. But it was better than doing nothing, right? We made more money than Clear Channel did or somebody, right? So I mean, we want -- I like what Aereo is doing. I respect what they're doing. I think it's very interesting. We'll continue to follow it. We'll continue to follow the legal case.

Your next question comes from the line of Mike Farrell with Multichannel News.

I just got 2 quick ones. One, Joe, I mean, when you were talking on the analyst portion of the call, it seemed like you were saying that Hopper with Sling was kind of an elegant way around TV Everywhere charges. And I'm wondering if that's going to become a major issue around renewal time with a lot of these programmers or if you've already kind of been talking with them. And secondly, just a quick thing. I'm seeing a couple of your competitors start to implement surcharges for regional sports networks, and just wondering what your take is on that. Do you see that as an opportunity, I mean, either way as far as implementing them yourself or using them kind of as a marketing tool in some areas, saying, "We're not charging for this"? Joseph P. Clayton: Well, let me take the first one. With regard to Sling, let's be honest, the Sling technology we've been using and has been around for almost 7 years -- 6, 7 years now. So we believe it's a standard practice, and we don't anticipate any conflict with the programmers when we're up for renewals. So maybe that's just being optimistic, but that's how we look at it. In terms of the regional sport network surcharge, once again, we have to be realists that sports programming is escalating much more than double digits, and we are reaching a level of diminishing returns. I mean, how much will a consumer pay to watch sports content. So we can -- we can't just continue to eat this. So we'll have to pass it through as we go forward, if the costs continue to escalate. So when and how and where we'll do that still remains to be seen.

I mean, are you planning... Charles W. Ergen: This is Charlie. I'd just add on Sling, Sling's a little bit different technology than the authentication thing that some of the programmers are doing. So I think you're going to see an environment where both are there. For example, what ESPN does with WatchESPN, what they do there is a much more elegant solution than Sling is because you're going to get a better quality video off a server and you could do things like look-back features and things that you wouldn't be able to do with Sling. So I think they both -- I think that when people weren't doing things like authentication, Sling was certainly a necessity. It becomes less of a necessity as programmers kind of catch up with technology, which kind of ESPN is one of the leaders of and HBO has done a really good job with it, as an example. Then Sling becomes a little bit less important outside the home. But inside the home, Sling is dynamite because it just -- it allows you to take your -- it allows all your devices to work in the home. That's great for programmers because they're getting more eyeballs. It makes it -- we can make it more interactive, we can make it more focused, we can make it -- we give second-screen experiences to consumers, which is another advertising revenue, another eyeball revenue for the programmers. So in the home is where I think Sling is going to -- I would say it this way. The majority of people who use Sling today, the vast -- by a big margin, are using Sling in the home. And a few years from now, it almost will be predominantly in the home because this is an elegant way to do the technology in your house. And outside the home, I would predict that it's going to be more the way ESPN and HBO are doing it, but I could be wrong.

Your next question comes from the line of Jeff Bercovici with Forbes.

This question is for Charlie. I was just hoping you could expand a little bit. When you were talking about what the networks are going to have to do to sort of rethink advertising rather than keeping their heads in the sand, can you talk a little bit more specifically about what you meant by that? And also slightly related, but I know that some of the networks have -- you said that some of the networks have rejected advertising for the Hopper. I was wondering if you could say which networks. Charles W. Ergen: You want to take the second part, Joe? Joseph P. Clayton: I'll take the second. First, all prime-time networks, FOX, ABC, CBS and NBC, have rejected our spots, not just the AutoHop spots, but all Hopper spots. Cable TV is taking our spots. Charles W. Ergen: On the second part, from an advertiser perspective, again, this is just my take on it. And again, I will first say, I'm not an expert in -- I don't have insight into how advertising works from the inner workings of how a network works, so I -- things I don't understand. And so I could be off base a little bit. But normally, the advertising -- today, advertising is -- most advertising revenue comes when people watch something live. And kind of the maximum you can get revenue is called C3. So if somebody watches it within 3 days, that in many cases that may be metered. If somebody watches on the fourth day, the networks get absolutely 0 credit for that. So that's number one. Number two, I only watch human nature. I only watch -- I'm only in people's homes, whether it's our DVR or our competitors' DVRs, people do skip commercials, right? In fact, I would venture to say that network executives skip commercials, right? So that means you got no revenue. If it was metered correctly, you'd get no revenue for that when somebody does it. So you can put -- for me, rather than put my head in the sand on that, I would say, "Okay, how would I get someone to either not skip a commercial so I get revenue? Or how would I get revenue after 3 days?" And I think there's things that we can do with the networks and with their experience and with their knowledge and with their permission that if we look at -- if we took prime-time television and took the total amount of revenue that they get on 100 of our competitors' revenue, and took 100 DISH Network Hopper customers, they would get more revenue and happier customers from the Hopper, that I believe. But it takes a two-way conversation to do that. And my gut feel is that the litigation will go on, somebody will prevail in the litigation. And once that happens, then people will talk about how to make it work for everybody, right? And if we were to prevail or they prevail, then the conversation might be a little bit different. But at the end of the day, regardless of litigation, I think we'll end up in the same point of how we attack the customers from an advertising perspective because DISH believes in a 2 -- DISH believes the 2-revenue system model is the right model for broadcast programming. Otherwise, the rates would be too high for customers, and I believe customers will watch meaningful advertising, and they'll be happy they're paying less for their content as a result. But today with -- in an hour show, with 18 or 20 minutes of commercials and most of those are irrelevant to you, and you can go to the Internet and bypass that, that is not a good model for us. I don't think that's a sustainable model for the networks. So there'll be -- again, I would predict that some network executives will -- what I just said, some network executives would agree with more than others, right? And some network executives will say, "Yes, we want to lead technology and make the rules." Some will be fast followers, right? But I think what we're doing, I honestly believe what we're doing will ultimately be good for consumers and the networks.

Your next question comes from the line of Jeff Williams from Satellite Business.

Charlie, a quick question for you on the wireless service. If it takes several years to launch a wireless service, how concerned are you that in the interim period, so many people will have Internet service through another provider that there won't be much of a market left for you and what are you going to have to do to appeal to those people to switch to yours at that point? Charles W. Ergen: Well, I mean, what, 70% of people have Internet services today. So that is approaching a mature market. So whatever we do would have to meet 2 criteria. It would have to be better and has to be less expensive. And as long as what we do is better and less expensive, then we can take market share, right? And so that's -- from a big-picture perspective, that's what we'd have to do, take market share in the broadband side -- or the wireless side. And if we can't do that, then we'll fail. And Jeff, you know from DBS, that's why DBS was successful. It was less expensive. It was better picture quality. Customer had more choice, had more HD. It was a better experience, and it took market share from the cable guys. So today -- the cable guys had 100% market share when DIRECTV started and we started, right? And today, we are closing in on 30 -- over 34 million out of 90 million, so I don't know what that is, 40% market share? Close? Why? Well, we were better, and at least in DISH's case, we were less expensive.

Your next question comes from the line of Jimmy Schaeffer with Carmel Group.

My first question is for Joe and Charlie. What do each of you think 4K TV, or TV shot for monitors with 4,000 or more vertical lines will do for this industry? And to elaborate, having for the past 10 years witnessed something real similar in HDTV, will 4K grow as fast as HD? What will be the comparisons and differences? And what have we learned? And then my second question is an update on DISH or satellite TV network piracy as an issue today as it has been in the past. And I guess this is particularly relevant in line with what's been happening recently in the cyber world. Joseph P. Clayton: Jimmy, I'll take the 4K. Obviously, it's impressive. I saw it at CD and I saw at the Consumer Electronics Show. But I think it is going to be a slow rollout because of the cost, but more importantly because of the lack of programming. It's the chicken and egg situation all over again. I do believe it will get more traction than 3D. Because I first saw 3D 35 years ago, I was told it was right around the corner. Of course, it's still right around the corner. But I think 4K shows with volume can get the cost down and with programming, I believe it can follow a curve like HDTV. But it's not going to be overnight. Charles W. Ergen: Jimmy, I'll take the piracy question. Obviously, you're an expert in this. But piracy remains an issue both in cable, Internet and satellite. And I think there's -- the core answer to piracy is to make sure that you make content available that's convenient and fair for consumers. If you don't do that, there's not anything that anybody can do that would totally eliminate piracy so. And as we live -- together, we lived through the C-band industry where the programmers didn't make it available to people, they stole it, right? And the music industry went through that. So I think first and foremost as a guideline, I would say, we've got to make content convenient and fair, fairly priced. Then obviously, from our perspective, there are technical things that we do, whether it be changing out the keys or smart cards or litigation. And we've probably been one of more aggressive companies on litigation and have gotten a number of lawsuits -- verdicts against people and put people in jail. So -- and continue to do that, and we'll continue to do that. That's a bit of a Whac-A-Mole strategy, and the better way to do it is -- I'll give you an example, if you have a movie in the movie theater and you can't -- and you can go to the movie theater, but then you can't buy that movie for 6 months, people are going to steal it. If you can buy that movie 6 days after it's in the movie theater, probably less so. So where's the balance? Studios will have to run those numbers and figure it out. I'm not sure they've got the right balance right now, just as a real-world example.

Your next question comes from the line of Erik Gruenwedel with Home Media Magazine.

I want to know, what's the final endgame for Blockbuster? You've got about 500 stores remaining, are you going to make these stores into a smaller retail footprint? Will you open up new stores with a smaller footprint? What's the endgame for Blockbuster? Charles W. Ergen: This is Charlie. I'm just going to -- the main reason that we -- when purchasing Blockbuster was to -- actually was to use stores in a hybrid fashion which was for DVD or for video and for our wireless product because we thought we'd be a little faster on the regulatory side. And that's taken longer than obviously we would have liked. And the stores are just too big for video only as a product, right? Although the ones we have left have enough volume to support that. But we'll just continue to evaluate Blockbuster. We don't do it in a vacuum. We evaluate Blockbuster, but we're also evaluating where we are in our other businesses. The Blockbuster locations are pretty premium locations and the lease rates are attractive. So there's a real asset there as long as we can kind of tread water long enough to be able to use them for wireless or other products, or if not, we reevaluate it and say, if we're actually going to lose money, it doesn't make sense to hold on to it, we'd have to shut it down. So that's kind of what we've done. Robert, I don't know. You've been more involved in this. Do you want to add to that? Robert E. Olson: Yes, I think we continue to look at each store's individual profitability and the stores that we have left met that threshold. That is something that we look at every month. Joseph P. Clayton: And the nonstrategic assets like the Blockbuster U.K., we'll monetize those. Charles W. Ergen: Bob, you got any closing comments, Bob?

Thank you for everyone who joined from the media. We're glad to have you. Charles W. Ergen: This was an experiment. But let Bob know what you think and based on the feedback we get, we'll see whether we continue to do this. Fair?

Yes, sir. Thank you. Joseph P. Clayton: Thank you all for joining in.

Thank you for joining, ladies and gentlemen. This concludes today's conference call. You may now disconnect.