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

Marci Ryvicker - Wells Fargo Securities, LLC, Research Division Philip Cusick - JP Morgan Chase & Co, Research Division Walter Piecyk - BTIG, LLC, Research Division Richard Greenfield - BTIG, LLC, Research Division Benjamin Swinburne - Morgan Stanley, Research Division Amy Yong - Macquarie Research Craig Moffett - MoffettNathanson LLC Jason B. Bazinet - Citigroup Inc, Research Division Matthew J. Harrigan - Wunderlich Securities Inc., Research Division James M. Ratcliffe - The Buckingham Research Group Incorporated Thomas William Eagan - Telsey Advisory Group LLC Bryan D. Kraft - Evercore Partners Inc., Research Division

Good morning. 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 Q2 2014 Earnings Conference Call. [Operator Instructions] Mr. Jason Kiser, Treasurer, you may begin your conference.

Thanks, Stephanie. Thanks for joining us. This is Jason Kiser. I'm the Treasurer here at DISH Network, joined today by Charlie Ergen, our Chairman; Joe Clayton, our CEO; Tom Cullen, EVP of Corporate Development; Bernie Han, our COO; Robert Olson, our CFO; Paul Orban, our Controller; and Stanton Dodge, our General Counsel. Joe and Robert have some prepared remarks, but before we get into that, we need to do our Safe Harbor disclosure. So with that, I'm going to turn it over to Stan. R. Stanton Dodge: Thanks, Jason, and good morning, everyone, and thank you for joining us. 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 and from any future results expressed or implied by such forward-looking statements. For a list of those factors, please refer to the front of our 10-Q. All cautionary statements we make during this call should be understood as being applicable to any forward-looking statements that 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 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. Today, I'm going to focus my remarks on our core pay-TV and broadband businesses. Charlie and Tom Cullen are also here to take your questions on wireless and Internet video a little later. Now before getting into the second quarter performance, I want to give you all a brief update on our marketing plans. As most of you are aware, in early March, DISH signed a long-term programming contract with the Disney company. This agreement gives DISH the carriage rights of the soon-to-be launched Southeastern Conference Network and the Texas Longhorn Network. When combined with our nationwide availability of the Pac-12 Sports and the Big Ten Networks, DISH is the favorite destination for college sports fans everywhere. This fall, we will offer more football games, both NFL and college, than any other pay-TV provider. In addition, our extensive multi-sports package offers a total of 35 of our most popular sports programs, like the NFL RedZone, the Pac-12 Network, the Big Ten Network, most regional sports networks, plus NBA, MLB and NHL. All will be included at no extra charge for new qualifying DISH customers this fall. As an added bonus, to help celebrate the launch of the Southeastern Conference Network, new DISH qualifying customers will also receive an SEC school flag of their choice, like Kentucky, Tennessee or any other of the Southeastern Conference schools, absolutely free. Now we're making the same consumer offer for the Pac-12 and the Texas Longhorn Networks as well. Our national multi-sports promotion will be supported by national, regional and local television, national and local radio, billboards and print ads. Yes, DISH is ready for the fall in a big way when it comes to sports. So now let's move on to the second quarter. We faced aggressive promotions, a weak economy and merger mania in the second quarter. Of course, this is traditionally a soft sales period for the industry. In pay-TV, we lost 44,000 customers, which was 34,000 less than we lost in the second quarter of 2013. In spite of this general industry sales slowdown, we were pleased with our churn results of 1.66%, slightly better than our second quarter churn of last year. So we stayed the course, growing our base of high-value customers and increasing the percentage of customer activations with HD, DVR and IP connections. Also in the second quarter, we continued to experience broadband growth in both dishNET satellite and wireline businesses, which somewhat offsets the softness in our core pay-TV business. We added 36,000 broadband subscribers, growing our customer base to 525,000. Now this is somewhat lower than previous quarters. However, it is a direct result of normal seasonality kicking in and the sales success in certain geographical markets that are now filling up the satellite beams, thus limiting supply. Now we expect these capacity issues will be addressed when both Hughes and ViaSat launch their next-generation high-powered satellites in late 2015 or early 2016. Now given some of the demand restrictions, we've tightened credit qualifications and scaled back promotional discounts. Now while all of these are prudent moves, it will moderate our sales in the short term. So with a mature market and a seasonally slow quarter, we still realized efficiencies, lowered churn and improved service call rates. We still have a lot more work ahead of us, but we are on track. Now to provide you all with additional details on our second quarter performance, here's our CFO, Robert Olson. Robert E. Olson: Thank you. As Joe noted, second quarter is traditionally a tougher quarter for the pay-TV industry. While we lost 44,000 net pay-TV subscribers in the quarter, this represented an improvement of 34,000 versus last year. The improvement was driven largely by increased new activations. Pay-TV churn was slightly better year-over-year, but up sequentially due to normal seasonality. Our broadband business continued to experience solid growth. We ended the quarter with 525,000 broadband subscribers, up 36,000 net subscribers versus last quarter. We saw higher broadband churn this quarter, partly due to the same seasonality we experienced in the pay-TV business. Revenue increased $202 million or 5.8% in the second quarter compared to last year. This growth was largely driven by pay-TV ARPU, which was up $3.34 or 4.1% year-over-year. Our broadband business also contributed to the subscriber-related revenue growth, accounting for $45 million of the year-over-year revenue increase. Subscriber-related expenses increased by 9.4% in the second quarter versus last year. This increase was largely due to higher pay-TV programming expense, but higher broadband subscriber-related expenses contributed roughly 1.3 points of the year-over-year increase. The higher programming costs were primarily driven by increases in our contractual rates. The increased broadband expenses were driven by higher average subscriber levels. Our pay-TV SAC per activation for the quarter was $846, which was roughly in line with our recent run rate. The year-over-year decrease of $37 was driven by a reduction in manufacturing cost of the Hopper with Sling receiver and a higher percentage of activations with remanufactured receivers. Satellite and transmission expense was up $31 million sequentially and $45 million year-over-year. These increases were primarily driven by the satellite and tracking stock transaction with EchoStar, which was effective on March 1. Administrative expenses were down $13 million year-over-year in the second quarter, largely due to spectrum M&A expense we incurred last year. We expect G&A expense to be relatively flat compared to 2013 for the rest of the year. Depreciation expense decreased $33 million year-over-year as we incurred $53 million of accelerated depreciation last year associated with the TerreStar MSS business. Both operating income and net income improved significantly year-over-year as a result of the impairment we took on our AWS-4 satellites in the second quarter of 2013. Excluding this charge, both metrics were roughly flat year-over-year. Net income increased by $37 million sequentially, partially driven by a full quarter impact of our February price increase and by capitalized interest associated with our recently purchased H-Block spectrum licenses. We generated $168 million of adjusted free cash flow in the second quarter, which was slightly below net income. As I discussed last quarter, there's normal seasonality to free cash flow, with first quarter typically higher and second quarter typically lower due to the timing of tax payments. We expect that free cash flow will be roughly in the same ballpark as net income for the full year 2014. Relative to our year-end 2013 balance sheet, we saw reductions of slightly over $800 million in cash and marketable securities, driven by our purchase of the H-Block licenses, partially offset by cash generated this year. Let me now turn it back to Joe before we go to Q&A. Joseph P. Clayton: Thanks, Robert. In summary, we are focused on continuing to strengthen our best-in-class video experience, to grow incremental revenue streams and to maximize our core pay-TV business, while making strategic investments for future growth. Thanks for joining us today for our second quarter earnings call. Now we'll open it up to your questions.

[Operator Instructions] Our first question comes from the line of Marci Ryvicker with Wells Fargo. Marci Ryvicker - Wells Fargo Securities, LLC, Research Division: I have 2 questions for Charlie. The first is, Charlie, is there a scenario, any scenario, where you would sell your spectrum holdings and keep the pay-TV business? That's the first question. And then the second question is now that Sprint has walked away from T-Mo, do you have any interest in either pursuing a business partnership or an acquisition with either one of them? Charles W. Ergen: Well, I mean, I think nothing's really changed strategically from what we've always talked about, right? And the goalpost of what we might do as a company is we could build out our network by ourselves. Then one unlikely scenario, on the far end of the spectrum, a less likely scenario is we'd sell spectrum, just raw spectrum by itself. And in between, there's a number of partnerships and things we could do that would not only enhance our spectrum and make that -- and use that to our long-term advantage but also enhance what we do in our core business, which obviously is a mature business today. So the answer is -- short answer is yes, it's possible we would sell spectrum by itself. That is not our preference, and that -- I would consider that a personal failure if that's what we end up doing. But we're not suicidal, and the spectrum is very valuable. And if we can't -- if for whatever reason, we can't enter the business and be competitive and make our business better, we know we have a core value floor that has continued to go up and I think will continue to go up. Obviously, on the more M&A side, a lot has happened in the last 24 hours, and we really haven't had a chance to sit down and discuss that internally, but we remain interested in working to enhance our overall business, and that could include looking at the number of companies out there. Obviously, the AT&T-DIRECTV deal have probably lessened some optionality that we had. The Sprint announcement last night probably increased some optionality we have. Marci Ryvicker - Wells Fargo Securities, LLC, Research Division: There was some confusion. Have you -- did you look to buy T-Mo in the past? Charles W. Ergen: I don't think I can comment on that. I mean, I think what I'd say is, it's a relatively small industry. You can assume that everybody talks to everybody. And I think there hasn't been a public disclosure of M&A where DISH probably wasn't A, B, C or D company. But to go beyond that, probably not appropriate.

Our next question comes from the line of Phil Cusick with JPMorgan. Philip Cusick - JP Morgan Chase & Co, Research Division: I guess the first question is for Tom in terms of wireless. You talked about different strategies. But could you see doing anything between now and the AWS auction? Or is it still most important to nail down your spectrum position in AWS before you go anywhere? Thomas A. Cullen: As Charlie said, the news cycle the last day has been pretty intense, so we haven't really had much of a chance to digest the changes nor, I think, has the market had the chance to digest it. That being said, as you're probably aware, the anti-collusion rules associated with the AWS 3 auction kick in on September 12. So there's really only about 5 weeks between now and then. But in the meantime, we'll, of course, consider our options, as we always do. Philip Cusick - JP Morgan Chase & Co, Research Division: And then a little more operational for, I guess, for Robert. But last year, we talked about how falling costs on Hopper manufacturing, and certainly to get returns on those, would give you some decisions to make, whether you let SAC costs come down or try and reaccelerate the business. How are you thinking about that today? Robert E. Olson: Phil, this is Robert. I think SAC will come down, and we've talked about the fact that we get cost efficiencies in our agreement with EchoStar as time goes on, so that helps us out. And then also, we have increased percentages of remanufactured receivers. So I think SAC is a place where we think it will maintain that level for quite a while.

Our next question comes from the line of Walter Piecyk with BTIG. Walter Piecyk - BTIG, LLC, Research Division: I guess the first question, just a quick one on the annual meeting. Is there a reason one hasn't been scheduled? R. Stanton Dodge: It has been scheduled now, and I believe it's reported in the 10-Q. October 31st or 30th? I think it's the 30th. Walter Piecyk - BTIG, LLC, Research Division: Okay. And then on the... R. Stanton Dodge: October 30. Walter Piecyk - BTIG, LLC, Research Division: Got you. And then on the strategic partnership front, as far as if you look at the different options that you have, do any of those partnerships do you think require you to bring in a partner, a third-party for capital or expertise in running a business? Charles W. Ergen: This is Charlie. I mean, look, there's always people that are going to help us and we're willing to take a lot people's help. But obviously, you can look at our balance sheet, we have a fair amount of capital. We are not experts in the wireless business today. I mean, we're not even experts in the video business, and we've been in it for over 30 years. So I think we always are learning stuff. And if people are going to help us and if a business deal makes sense, then that's something we'd consider. I mean, I think what we have to do is go back and read all the analyst reports that come out in the next couple of days, like yours, and then that will give us a path to what we should do. We don't really have a corporate development team here. We just take the analyst reports and summarize them and then whichever one sounds good is kind of what we do. And we just haven't had the chance to summarize those yet. Walter Piecyk - BTIG, LLC, Research Division: Well, I'm obviously sure that's not the case. Things -- your tone has changed a little bit as far as the spectrum is concerned. I don't think you were as willing, I don't know, 6 months or a year ago, to maybe sell the spectrum outright. And obviously, that would create a significant taxable gain, given where the implied value is there. So is there a reason there's been that type of tone change as far as the spectrum is concerned? Charles W. Ergen: Well, I think I started to answer the question. There's 2 ends of the goal post, which is how we look at things. One is to kind of go it alone and one would be to sell the raw spectrum. Both of those are relatively unlikely, and certainly, wouldn't be our preferred route. But if you can imagine that you got to a situation where there was no realistic business transaction you could do that can enhance your core business and help you compete in the marketplace, which is what we want to do, and we don't think -- and we didn't think we can make a difference to the consumer, right, we would be -- we wouldn't be hesitant at that point to look at a spectrum sale. And we think that that's not a likely scenario. That's certainly not number one, two or three on what we're focused on. But we have an auction coming up, and Tom may want to comment on this. This'll be a bit longer answer, but the auction is going to tell us kind of where we stand on a baseline value as a company, right? And this auction is the first auction of meaningful spectrum in the mid-band, high-capacity since 2008. And so a lot has changed since 2008. There's going to be a reset of values for this mid-band spectrum. And the reason is because, obviously, we now have the advent of smartphones, we now have the advent of tremendous capacity demands on the network, particularly because of video, and that demand is almost all on the downlink side. And spectrum is typically auctioned off paired, uplink and downlink. In the meantime, DISH has got the option to go all downlink with its spectrum. So we actually have about twice -- we have twice as much downlink spectrum, mid-band spectrum, as is going to be auctioned off in this auction. And as a result of that, it's not going to take a lot of really -- it's not going to take a real mathematician to figure out the value of this when this auction happens, and look at that paired spectrum and pretty much say whatever that value goes for, in general, DISH has probably got twice as much value on its balance sheet. And I think that where people think that auction is going to go is somewhat -- I think, analysts have started to kind of increase where they think that price might be in the value of spectrum. But I think they're still low, and the reason I think they're still low is a variety of reasons, but of course, one is AT&T's acquisition of DIRECTV is a big acquisition for them, but they got no spectrum in that. So their only path to spectrum in the short term for high-capacity spectrum is in this auction. Verizon, I think, has publicly stated that they need more capacity. And T-Mobile now today knows they're probably going alone for the foreseeable future, and the auction's kind of tailor-made for them. They're the ones who really fought hard for this auction, for this particular band, because it fits pretty nicely into where they are. So you can imagine that there's at least 3 players that need spectrum. And of course, DISH looks at every option where there's an opportunity to enhance our position. So I think that, that's going to happen. And the reason our spectrum is probably worth say twice as much as the spectrum auction is because the uplink in this auction is impaired for 3 to 10 years, all right? So it's not going to be usable for a long period of time. The downlink is pretty clean. And the world has changed toward LTE. The most efficient way to do a network is 20 megahertz chunks, and DISH has 2 independent downlink 20 megahertz chunks potentially. And then we have virgin spectrum, so you can build out our spectrum where you need it. You don't have to build at places where you just don't have demand for it. So obviously, the bigger cities is where people are congested today. So there's a lot of good things coming in, so I think strategically, I think we talked about this in the last call, is we don't know what the value of our spectrum is, nobody really does, but I think we're going to know at least in our minds where that spectrum value is going to be by sometime early next year, when this auction takes place. And most of the things that we see -- I think the FCC has done a pretty good job of setting this auction up to be a pretty robust auction. And I think that it's funny, people will be able to play in the auction, almost do an arbitrage of DISH stock because as the value goes up, you'll see it every day and you'll see the closing price every day and you'll get a feel for kind of the value that we have. But I just think that it's underestimated by most analysts. I think -- could be wrong, and we're wrong a lot, but we're pretty confident that we have -- that the value that we have, core value we have, probably exceeds what people think. Walter Piecyk - BTIG, LLC, Research Division: Got it. And I think Greenfield also wants to hop on with a quick question about the actual business as opposed to the asset value of things. Richard Greenfield - BTIG, LLC, Research Division: When you look at the Sunday Ticket, Charlie, the contract with DIRECTV is ending. The AT&T deal seems contingent upon them renewing it, and while they're in some form of exclusive negotiating period now, just wondering, is there any good reason why the NFL wouldn't wait to see whether you have interest? And is there any reason why you wouldn't have interest? Not only is it a significant number of subscribers, but it also seems so integral to DIRECTV's marketing and this whole transaction with AT&T, why not take a shot at acquiring some of the world's best content? Charles W. Ergen: Well, I mean, again, obviously, we are interested in NFL Season Ticket. We would certainly be interested, if NFL open that up for bidding, we certainly would be a bidder. I think the NFL's dilemma now is that -- I don't think they want to be in a position to sell an NFL ticket where I think AT&T has some 5 million subscribers, and if DIRECTV were to get NFL Ticket on their past plans, they get those 5 million for free. That's number one. So I think NFL has got to take a look at that in terms of perhaps another increase on top of the increase because of the added potential customers to get it. And second, obviously, there are broadband rights and so forth that are more meaningful and more valuable in an AT&T-DIRECTV deal. So the NFL has got to look at that. But they also have contractual contracts in the past, and those contracts sometimes address renewal, and there are sometimes formulas in those. I know there are on the network deals. And so the NFL may have -- while they know that -- they know they're in a very, very strong position to get a material increase in the season ticket price... Richard Greenfield - BTIG, LLC, Research Division: Do you think you get a shot to bid? Charles W. Ergen: If we do, we will. But there are times, based on contracts, based on renewals, where you don't really get a chance to bid, if somebody meets a certain price. And so we just don't know how that will shake out. But I think DIRECTV, given the fact their merger depends on it, would probably have to be pretty confident that they're in the driver's seat there. It may be contractual. Because you would think the NFL wouldn't -- the NFL probably wouldn't leave -- historically, has not left billions of dollars on the table. And obviously, the NFL Season Tickets is worth billions of dollars more than it was before the DIRECTV merger with AT&T was announced, right? I mean, that suddenly added billions of dollars because you got more customers to go after in broadband, right? So you wouldn't think NFL would leave $3 billion on the table. The players wouldn't like it and the owners wouldn't like it.

Our next question comes from the line of Ben Swinburne with Morgan Stanley. Benjamin Swinburne - Morgan Stanley, Research Division: I have 2 questions. I wanted to ask on the auction. Charlie, you have helped us understand that the auction will help us figure out what your stock is worth. I'm wondering what you think the decision tree looks like for you if you end up coming out of the auction with spectrum, a meaningful amount of spectrum or not, since there seems to be a ton of demand, as you pointed out. So there's a potential where the per MHz-POP is huge, but DISH is outbid. And so what's your -- how does that impact your thought process? And then I have a follow-up just on the TSS stuff. Charles W. Ergen: Well, I mean, I would just say if the auction goes for a low price, we'll probably end up with a lot of spectrum. If the auction goes for a high price, we probably won't end up with very much. I mean -- but if it goes for a high price, I think it probably enhances our balance sheet, not detrimental to it. So we feel confident in auctions, we're going to participate. We anticipate participating in the incentive auction, when that happens. We're pretty educated to auction process. We participate, I think, in every major auction that the FCC's had. We normally don't win much, but from time to time, we do. And there's an incentive for us to participate in this auction. So I think it's just the -- I think we have to wait and see, but I think it will be -- it's going to be very interesting because the world's changed since 2008. And this is the first time -- I think AT&T has got to participate in a big way because they have no path to more capacity and you just can't put 100 million -- they only have about 50 megahertz of downlink spectrum. It's really hard to put 100 million people on 50 megahertz. And I think Verizon has got about 50 megahertz of downlink spectrum. They got 117 million people. That's really tough to have a network and you start -- I mean, T-Mo has the highest speeds today. I think that's probably realistic. And I think that Sprint, particularly with the management changes they're making and with the leadership of SoftBank is -- and with their spectrum position, is going to be really, really a fast network, particularly in the big cities. So there's going to be a lot pressure. And the other thing, you got to look at spectrum, which I think one analyst is taking a shot at, but the other way that you can get capacity is you can densify your network. So the big players could go out and build more towers, spend the CapEx and the OpEx to do that, right? And you have to balance, say, getting 10 megahertz of spectrum versus what it would cost you to densify your network to get a comparable 10 megahertz of spectrum. And when you run that math, and again we are not experts in this, but when you run that math, you can pay a lot of money at auction to save that CapEx and OpEx over time. And of course, you buy the spectrum so it probably doesn't go down, so it's shaping up as a pretty -- the FCC just, I think, is going to be pleasantly surprised. I think they've done a good job on this particular auction. Benjamin Swinburne - Morgan Stanley, Research Division: Maybe to rephrase, does the outcome of this auction push you in one direction? You think that those 2 goalposts you laid out; go alone or sell effectively. Does it push you in either direction depending on the outcome of this auction? Charles W. Ergen: Well, I mean, I think our dream would be to compete in the marketplace, bring a better product to consumers, be disruptive, be innovative and enhance the video business that we have today. It looks like AT&T paid about 7.5x for DIRECTV's maybe $1,500 a sub, right? So you kind of get a valuation, at least in an acquisition mode, of what video's worth. I think AT&T is smart to think that video is strategically important to a wireless network operator. I think they're going to use that to their advantage. I think that's going to put pressure on people who don't have video assets in the wireless world. I think those 2 things go together pretty nicely because most of the data on wireless networks in the future will be, in fact, video. Let's just take one simple example. 20 years ago, when you were in your house, you -- 20 years ago, when you made a phone call, you only made it one of two ways. You made it in your house on a landline or you put $0.10 or $0.20 or $0.25 in a coin machine and made a pay call. That's the only way you made phone calls. Today, primarily, you only watch TV on the TV set in your house. But 20 years from now, and it's not going to take 20 years, by the way, you're probably going to be watching most of your TV not on the big screen in your house, just as you don't make most of your phone calls -- in fact, you may make none of your phone calls on a pay phone and you may make none of your phone calls on a landline today. So TV is going to follow the phone business, not quite to the degree because you're still going to want to sit in front of the big TV sometimes. But for the most part, the majority of your viewing is going to be on a screen other than the way you watch it today. And that opens up a lot of opportunity for DISH and for our content providers. And so one of the reasons that we're focused on OTT and Joe and his team are focused on OTT is that's a way where DISH and its content providers can start a new service that hopefully is incremental to the business today, hopefully has a different advertising model than the way we do it today with DVRs, and hopefully, it leads to a mobile business or wireless business that's incremental revenue to our content partners. That's the first thing that I've seen that's in the business that's more of a win-win situation with content partners rather than always the zero-sum game you get into when you have a negotiation, where they want $0.01 more, you want to pay $0.01 less. Now we're in a situation where there can be an ecosystem where both the content provider and DISH can both make a $0.01 more based on the way the ecosystem works. So that's the dream for us. We have a vision of that. It hasn't changed in probably 6 or 7 or 8 years. I think we've been talking about it. We don't see anything -- everything we see says that's the right way to go. We don't see anything changing that. But we're a small company compared to these telecommunication giants, and whether we can compete on that remains to be seen. Benjamin Swinburne - Morgan Stanley, Research Division: And then just on that video front, the A&E deal announced this week seemed to move you guys into a multi-stream product position. I just wondered if you'd comment if that was a step forward beyond the Disney deal. And then what's the timing on launch? I think last call, Charlie, you said, by the end of the year. I just wanted to see if there's an update there. Charles W. Ergen: Yes, so launch, still by the end of the year. The A&E deal and other deals we look at -- every deal is a little bit different for OTT, but Disney remains the core of our OTT deals, and to some degree, I'd say we'll be at the lowest common denominator. And I think one of the things that we'd like to do with our content providers -- we think OTT's a good smart move. We think it's incremental value to both us and the content provider, but we're not absolutely positive. And we know that we're going to be -- we could be disruptive to the current ecosystem. And so we're going pretty cautiously about it with our content partners and the Disney -- what we've talked strategically with Disney is the core strategy of where we're going about it.

Our next question comes from the line of Amy Yong with Macquarie. Amy Yong - Macquarie Research: I'm wondering if I can pick your brain on the regulatory front. If you hold your spectrum, do you think that you would face any regulatory hurdles if you tried selling to a larger player in the U.S.? And I guess would you still rule out AT&T in purchasing your spectrum? And then just stepping back and thinking about AT&T and DTV, it looks like you walked away from DTV. Was that more strategic or something a little bit more on the regulatory front? Just thoughts on that. Charles W. Ergen: I don't know if Tom wants to jump in. But on DTV, it wasn't a regulatory issue. It was really a valuation issue. The problem we had is the way -- it was really, unfortunately, a timing issue for us because the way we were valued and the way DTV was valued, there was probably a $15 billion gap, $10 billion or $15 billion gap, and we were confident that our value was certainly at least equivalent to DIRECTV, based on the fact that we had a future combining spectrum and wireless and video together, and they were a bit more of a one-man band, right? And so anything that we could've done with DIRECTV, their shareholders would've got 100% of the synergies. And the synergies would have been huge. So -- but their shareholders would have got 90% to 100% of it. So we just didn't think, in fairness, we could ever do a deal where their shareholders got all the synergy and our shareholders didn't get much because the market's a little bit behind on our valuation, or a little ahead on their valuation. And then to their credit, I think Mike White did a fabulous job of timing, and -- which is very traditional, running a great operation, buying back your stock and selling probably perhaps at the peak of -- almost the peak of their business. So to somebody who strategically could use you, right, whereas absent a big acquisition, DIRECTV didn't have a long-term future as a standalone company. So I think they did a fabulous job, and shareholders should be kind of erecting a statue to Mike White and Chase Carey before him, and Eddy Hartenstein. Those guys just built a great business. From a regulatory point of view, I think the regulation that would probably trip up any sale of spectrum, again, that's not where we're headed, but is probably the spectrum cap. And Tom, I don't know if you... Thomas A. Cullen: Yes, let me dovetail off of that. First of all, I'd remind everyone that the 2 mergers that are being discussed are proposed mergers. And there are very important policies and regulatory issues yet to be resolved associated with both of those proposed transactions. It would be premature for us to think about, down the road, if we were to be in a spectrum sale, what the regulatory outcome would be. Because as we can see in the last year, the industry structure is changing in front of our eyes. And so I think at this point, it'd be speculative to say what might occur in 2015, '16 or '17. But it's -- certainly between now and when we have build out requirements associated with the spectrum, there are many things changing on the landscape.

Our next question comes from the line of Craig Moffett with MoffettNathanson. Craig Moffett - MoffettNathanson LLC: Charlie, I just want to make sure I understand your vision a little bit better. You've talked a lot about OTT and the interaction of OTT, video and wireless, and you were just talking about it a couple of minutes ago. Is it your vision that the wireless business is a bundling opportunity, that it allows you to be more competitive with a bundle? Or is it a vision that says I need to be vertically integrated into content delivery over my own proprietary network? So unlike Netflix that is network-agnostic, for example, that you'd be building something that is truly network-specific over wireless. Is that latter description your vision for what you want to do with video? Charles W. Ergen: It could be both. It could be both of your scenarios. But certainly, if you could -- if you had your own wireless network that you could control, that you could give a quality of service to customers that was consistent, that took their home experience and made it exactly the same on all their devices no matter where they are, right, and at the same time, from an advertising point of view, took that mobile content, right -- and your mobile content will be 2 ways: one will be broadcast and one will be peer-to-peer, right? And you might advertise differently on both of those. But when you get into the mobile world, you're on smart devices. And those smart devices, they know who you are, they know where you are through GPS. They know -- they have your credit card information, it's your wallet, it's interactive, so you can actually purchase something. That changes the dynamics for the ecosystem in terms of what amount of money both DISH and the content providers can get, because suddenly, we're in the mobile business, right? And I've said this before, but I think Facebook was, 2 years ago, 0% of their revenue was in mobile. And last quarter, it was 62%. 2 years went from 0 to 62%. Very little of our content providers' revenue today is in the mobile side of the business. And so once we have enough bandwidth and an efficient enough network, particularly enough downlink, then you can offer a great experience on the mobile side, and that's where most of the data is going to be. Data is not going to be in a voice call or a text. So that's the way people built their networks, but that's not the way we build our network. So that's why virgin spectrum in 20 megahertz chunks is so valuable. And it gets more complicated than that, but we think it will be important to pay for a subscription to TV, get pay-TV, get it wherever you are, get it on all your devices and get ads streamed to you that are meaningful to you. You aren't -- 5 years from now, you're just not going to see an ad of an airplane flying with some music saying -- a branding ad that says, fly the friendly skies. Nobody's going to say that. The ad's going to say, book a ticket, push the button and book a ticket, right? That's going to be a better ad, right? You're not going to have a Starbucks ad with somebody sitting behind, talking about we brew coffee. You're going to just push the button to say what size cappuccino do you want. So advertising is going to change, and the difference in advertising revenue is dramatic compared to the linear television experience we have. And I think that advertising model is going to change. And so I think you have to be part of that. And the wireless network is not just what I said about video. The other thing about wireless networks is the number of devices, the number of things that will be connected to the network is going to grow by 10x what it is today. Every car, every pet, every child, every refrigerator, every camera, every security system, every watch, every machine is going to be connected wirelessly to a network, right? And so today, you're seeing growth in wireless on tablets, right? That's where most of the growth is coming from. But in the future, it's going to be all those other devices. Let me take a big step back. What you really have, what you really have going forward, in our vision, is in the palm of your hand, you're going to have all the information of -- all the information in the world in the palm of your hand no matter where you are, right? It's a computer. It's not a phone anymore, it's a computer, right? And it fits in the palm of your hand, and it's getting faster and smarter and better every day. And you're going to have all the world's information. You sit with your -- I sit with my kids and somebody's debating something, who won the 1956 election and somebody says Eisenhower, somebody says somebody else, and somebody just punches it and they'd say, well, it's Eisenhower, right? So I mean, every piece of information, every piece of video is going to be available, that you're going to have access to. And it's going to be great for productivity. Your heart's going to be monitored so we can reduce health care costs. Just everything is going to be connected in a wireless fashion. And most people look at the world as it is today, and they say, right, but I look at it as everything is going to be connected and no matter -- in my lifetime, the only way you get connected is through wireless spectrum. Someday, there'll be some other way to do it. They'll be using photons, there'll be some other way to do it. But in my lifetime, it's going to be wireless, and you're going to want to be connected and you're going to be happy to pay for it. And right now, in the United States, there's 4 companies that can do it. Craig Moffett - MoffettNathanson LLC: That's very helpful. If I could just ask one follow-up though, as it relates to that. So you talked a lot about spectrum comps, which I guess are an appropriate valuation methodology if you're going to be selling your spectrum. But I'm trying to reconcile how you think about the value of the spectrum as a commodity versus the present value of what you do with it if you put it to work. Because it sounds like what you're describing is putting it to work rather than in a transaction. Charles W. Ergen: Yes, you've asked the fundamental question, Craig. You asked it the way, I think, the way we look at it. We look at the fundamental value. The floor value's what you could sell it for, right? So we're going to have an auction, whatever that auction goes for, multiplied by 2, that's the floor value, right? Then we look at it as businesspeople, and Joe and his team and we look at that and say, unless we can build a business that's more valuable than the core value, we're a seller. But if we can build a business long term that's actually more valuable than the core value, then we're going to go do that, right? So we bid for a satellite spectrum auction back in 1998 or something, the first one, right? We believed that the value of the business we could build with that spectrum was more than the $670 million that, that actually went for, right? We would look at it -- I'll make it up. If you said our spectrum is worth $50 billion, right, and we could sell it for $50 billion, we look at that on the one hand. And on the other hand, we'd say, can we take that 50 -- can we take that spectrum and build a business that's more than $50 billion. And if we could, then we wouldn't sell it, right? And if we couldn't, selfishly, selfishly as a shareholder, we'd sell it, right? And so we don't -- we believe today, based on where we see wireless going, right, that we can build -- we certainly believe we can build a business today more than the value that we get in the marketplace for spectrum today, right, based on whatever -- even if you put 100% of our value on spectrum, it's about, what's that, $30 billion? That's $1 -- $2 a megahertz downlink spectrum, less than that. We think we can build a business more valuable than that. That's our -- we may be wrong, we may be naïve, we may be arrogant, but we're pretty sure we can build -- for those shareholders who want to stay in the long term, we'll build a business more valuable than that. If the spectrum is worth $50 billion, could we build a $50 billion business? We think we can. But we're less confident of that than we are at $30 billion, right? Does that make sense to you? I mean, you balance those 2 things. And our Board of Directors and our management team looks at that and says, what's the best long-term value to our shareholders, right? I mean, I hate to say it, we're just -- we're economic, rational businesspeople. It hasn't changed in 30-something years for those of you guys who have followed the company. We're long-term players, right? We're not a great stock for -- if you want somebody to flip some spectrum, make a quick buck, go buy somebody else. If you want to stick the stock in your drawer, we've done a pretty good job over the last 15 years. And I think our best days are ahead of us.

Our next question comes from the line of Jason Bazinet with Citi. Jason B. Bazinet - Citigroup Inc, Research Division: Another one for Mr. Ergen. When we get to the point where you have some sort of service that's available for consumers to purchase, do you anticipate positioning your wireless product as a landline substitute? Or is it more of a complement to your core video business as sort of an out-of-home video product? Charles W. Ergen: Well, if you're talking about landline for voice, I mean, I think the markets are already... Jason B. Bazinet - Citigroup Inc, Research Division: No, not wireline. Charles W. Ergen: Are you talking about a cable? Jason B. Bazinet - Citigroup Inc, Research Division: Yes. Charles W. Ergen: I think that they're -- I'm going to throw this back to Tom, but we are experimenting with both Sprint -- one of the great things I love about Sprint is their spectrum is tailor-made, I believe, for many homes to be a substitute for a fixed line to the house for broadband. And we're experimenting both with nTelos and Sprint. I think that Sprint's got a real key asset there. And I think that you can do that for some homes. And then some homes are so densely populated, right, that at least in the foreseeable future, probably running the cable or fiber is probably a better way to do that. Unless you're a low data user, and then I think wireless can be. So for some people who are mostly Internet and not streaming a lot of video, it could be a substitute. But Tom, maybe you want to talk about the trials. Thomas A. Cullen: Yes, Jason. As you know, we've announced trials with both nTelos and Sprint. We had been waiting on band 41 radios. I'd remind everyone that we're doing these trials on 2.5 spectrum, not our 2.0. But -- so we launched in the nTelos territories. July 15 was the actual first date for customers to sign up. So we're just -- we're adding customers now and installing new ones every day. The primary objective of these trials is to test the business model, i.e. how many customers can you adequately support in how much spectrum depth. Will the model work at 20 megahertz, or does it require 40, or does it require 60? As we've discussed in the past, the demand on spectrum is going to be different, obviously, for mobility in urban areas versus where you may have more spectrum depth in rural areas, you may have excess capacity that you could dedicate to fixed broadband. Again, the primary objective is to test that model. But we think with outdoor antennas on the rooftop, you're going to get better cell radius, the ability to provide more customer coverage off of a single tower, and those are the things that we hope to learn and better define in terms of consumer consumption patterns over the next 3 to 6 months. The Sprint trial has not yet launched, but it's expected to within a month.

Our next question comes from the line of Matthew Harrigan with Wunderlich. Matthew J. Harrigan - Wunderlich Securities Inc., Research Division: Maybe I'm not understanding something, but as an adjunct to Craig's second question, let's pretend AT&T buys a lot of AWS spectrum, and that's worth what it's worth to AT&T by virtue of having capacity limitation, having 100 million customers already. You're possibly removing a buyer from the market from a regulatory perspective, and you don't have free transferability. It's not a particularly smooth market. Isn't it a little tricky to say that, that spectrum shift that you own should be priced at that level when there might not even be another permissible buyer in the market? Because that is really a matter of you having had a very robust greenfield approach yourself or obviously, much more likely, finding a partner. Charles W. Ergen: Yes, I think you're probably missing how the marketplace probably works. But let's say AT&T buys -- there's 25 megahertz of spectrum, downlink spectrum available, right? So let's say, they get 15 of it, right? And they pay $2 a MHz-POP, right? Then I would say that our spectrum is more valuable than that. One, are they going to get nationwide spectrum, right? Maybe. Not likely. Are they going to get -- if they get 50 megahertz, how much does that leave for Verizon? How much does that leave for T-Mobile, right? 5 for each of those guys? Is that enough in today's world when you have 117 million customers that are using twice as much bandwidth and data every year, right? And then you have to balance that versus how much you have to densify your network and the cost of that. So there's just not enough spectrum in the next auction to probably feed everybody. It probably kicks the can down the road for them for a year. If they get 10 megahertz of downlink spectrum, it probably kicks the can down the road for a year. But 50 megahertz of downlink spectrum could make you a dominant provider. And the second thing is we're 20 megahertz blocks. So you're not -- I'd say it's highly unlikely that somebody in this auction will get a 20 megahertz nationwide block. And LTE, that's the most efficient, that's the fastest speeds you're going to get, that's the most efficient way to build your phone, that's the most efficient way to build your network, right, instead of being Swiss cheese with all different frequencies, where you got to have duplexers and different frequencies in your phones, and all kind of stuff, right? And then it's virgin spectrum too, which this auction will be, but it's virgin spectrum, so you can build it as you need it, right? As you go to -- one thing that analysts haven't picked up on enough is every time you go to another generation in wireless, it's not backward-compatible. So 4G is not backward-compatible to 3G. 5G is not going to be backward-compatible to 4G, which means you have to re-farm your spectrum. It means you have to take down spectrum and re-farm it to the new technology. When you have virgin spectrum, you can just start in the new technology. And trust me, having gone through a transition from MPEG-2 to MPEG-4, and having gone through a transition from SD to HD, it is painful and it is costly. And when you factor in those costs, virgin spectrum starts to look pretty good to you, right? And so -- I don't know, I probably didn't answer your question. But the bottom line is there's just not enough spectrum in the auction to feed everybody. And by the way, if somebody bids $2 and wins, they probably bid somebody -- they outbid somebody who bid $1.95 or $1.98. So somebody wanted it at $1.98 and didn't get it, right? So does that mean your spectrum is worth $1.95? I don't think so. It's worth $1.98 [ph]. Matthew J. Harrigan - Wunderlich Securities Inc., Research Division: I really think the values would be radically different to different buyers. But obviously, you know a lot more about this than I do, so I'll defer to you. Charles W. Ergen: No, I mean, I think that the value will be different to different buyers. The value will be different to different buyers. But I mean, somebody will say they need spectrum in New York because their network is clogged and they don't need spectrum in Grand Junction, Colorado, right? And somebody needs spectrum in Grand Junction, Colorado and not in New York. So the spectrum will be different, but I'm talking in generalization across the whole -- I wouldn't want to go -- I wouldn't want to participate in the auction for the first time, that would be difficult. But I think we've done it enough that we think it's -- and the money's going to public safety, which is a good thing. But we're a small player. We're a small player. My gut feel is the big guys are going to get the vast majority of it.

Our next question comes from the line of James Ratcliffe with Buckingham Group. James M. Ratcliffe - The Buckingham Research Group Incorporated: Two, if I could. First of all, I don't know if it's for Charlie or Robert, when you think about capital structure, I mean, clearly, you're sitting on a lot of cash for flexibility at this point. But if the point comes where you don't see a need for a lot of cash and flexibility for wireless and the like, what do you think the right capital structure for the actual underlying DBS and satellite broadband business is in terms of what the right leverage structure for that would look like? And secondly, Charlie, when you think about opportunities and when you think about M&A broadly, how important is it to you to retain the level of control you currently have at DISH in any sort of outcome entity? Robert E. Olson: So James, this is Robert. I'll start off. We've run the DBS pay-TV business with around $1 billion of cash. Obviously, you can look at our balance sheet, we're up close to $10 billion right now. And Charlie's talked about this before, that absent -- we think we have opportunities to invest, invest in the wireless business. Absent opportunities to invest, there's different things we could look at. We could look at returning money to shareholders. We have a steady stream of debt maturities over the next 5, 10 years, we can look at that. There's a lot of different options, but the preference is always if there's good investment opportunities to invest. Charles W. Ergen: Yes, and this is Charlie. I mean, the level of control -- I mean, obviously, there's a control premium if somebody wants to do something different. But I don't think that we would ever let that control issue stand in the way of a good deal for our shareholders, right? And there's been times in the past, I think -- we had a failed merger with DIRECTV, where that wasn't an issue. So -- but we're going to do the right thing for shareholders, long term.

Our next question comes from the line of Tom Eagan with Telsey Advisors. Thomas William Eagan - Telsey Advisory Group LLC: If I could ask a previous question in a different way. Charlie, I was hoping you might share with us your scenario analysis of the new OTT offerings. So for example, what are you thinking about might be the high and low share expected from the young adult market? And then I have a follow-up. Charles W. Ergen: I don't know if anyone wants to jump in on that. We don't know. I think our strategic vision is to try to get incremental customers who aren't pay-TV subscribers today. We'd like to get them at a younger age. I'm sitting here looking at some of our interns that are listening -- that are in our -- here, looking at them because they're young. So they probably didn't pay for TV in college except maybe for Netflix, right? We'd like to get them to pay for ESPN and get them started on pay-TV. And then as they move to a house with 3 or 4 TVs, they are already a pay-TV subscriber, they already have channels that they love, and they continue on. And my concern is that today, we're missing that whole generation. And so they come home, they go on the Internet and they watch something for free and maybe they subscribe to Netflix and a smaller percentage subscribe to Hulu or Amazon Prime. The core industry is missing them, so I think we have to do something to try to get them. I think the risk is, of course, you could get people turning off -- people in the ecosystem today downsizing, and we'll have to balance that and kind of see how that plays out. And that's why I think you'll see us go relatively slow at it and kind of see how it goes, but we know that the OTT model is a better advertising model too. So we know there's added revenue from an advertising perspective and we think we can get net incremental subscribers. I think the industry looks like it's relatively negative this quarter. Is that fair? I mean, I assume it is for the pay-TV industry. That's not good, right? And we can do nothing, right, and watch that go into that mature decline cycle or we can come up with new products and see if we can get incremental, that's what we're trying to do. Thomas William Eagan - Telsey Advisory Group LLC: Right. And then separately, with recent viewing technologies of yours, DISH has not long been really considered ad-friendly. So what conversations have you actually had with advertisers? Charles W. Ergen: Yes, I think the perception is we're not ad-friendly, and I think that's because we haven't been able to get anybody to share our vision that ads can be -- we haven't been in the past, I think that's changed. But I think in the past, we haven't been able to get people to share our vision that we can stream an individual ad to people and not the same thing to everybody. I just don't think that some -- I think some advertising is offensive to people, and I think some advertising just doesn't work as well when you have to advertise to the whole population that's very diverse today, right? So if you -- and so you've got a -- we think technology exists to stream an ad that's meaningful to you that we can probably do -- probably as an industry, we can do fewer ads and we can do more meaningful ads, and net-net, the money could be significantly more. But we've got to add mobile to the equation, we've got to add OTT to the equation.

We will now take our final question from the analyst community. [Operator Instructions] Our final analyst question comes from the line of Bryan Kraft with Evercore. Bryan D. Kraft - Evercore Partners Inc., Research Division: Just had another wireless question. You basically said that you'll only get into the business if you have a partner. So what would the ideal partner bring to the table, to the partnership? Charles W. Ergen: Well, our ideal partner would have a network, our ideal partner would have great management, our ideal partner would have a good capital structure, our ideal partner would have 100% market share. But I think there's a number of people that are potentially good partners, and I think that -- there's a lot of interesting ways that we can get into the marketplace. And I think it's just -- it may not be evident, even to us, until we kind of see how it all shakes out. I mean, obviously, we have to relook at things based on what happened yesterday, the last 24 hours, and I think the auction will be a reset. And then I think we'll have a clear path. And then the incentive auction could be another interesting opportunity, if that happens, right? Bryan D. Kraft - Evercore Partners Inc., Research Division: Do you need to get access... Charles W. Ergen: I think you have to -- I think -- I'll say it this way. I think as an entrepreneurial company, you end up gaining a fair degree of confidence that you can manage your way through this ever-changing landscape. And in fact, the more things change, the more you kind of like it because you're a little bit more nimble, you can move a little bit quicker. We didn't start thinking about wireless yesterday. It's been a long-term -- you go back 6 years and listen to an analyst call, it's been a long-term piece of what we've thought about. I would say that very little has happened in the marketplace that we didn't at least anticipate as a possibility and try to get ourselves in a position that if that happened, we'd be in a good position. I don't think it's a surprise that Sprint's walking away from T-Mo, right? I mean, sometimes the best deals you do are the ones you walk away from. And it takes a lot of guts to do it, but you don't want to get yourself tied up in 12 to 18 months of regulatory only to fail at the end. So that seems to me to be a smart move, but I think it could have been anticipated. I think it probably should've been anticipated because the government -- regulatory officials sent clear messages. So that shouldn't be a surprise to people today, right? And the auction and where the auction goes and how the dynamics of that auction -- shouldn't be a surprise to people when that happens. I don't know what's going to happen, but -- there's a range of things that could happen, but it shouldn't be a surprise. And so I think -- and the way the wireless technology evolves and the way that people use wireless technology, you're not using Google Glass without wireless. You're not having a smart car without wireless. The way wireless evolves and the value of that spectrum that enables you to do it shouldn't be a surprise to people 5 years from now. I don't know how else to say it. Bryan D. Kraft - Evercore Partners Inc., Research Division: Do you feel that you have to have access to low-frequency spectrum in order to get into the business? Is that a requirement from your standpoint? Charles W. Ergen: I think ideally, if you're building a traditional network, that you need a balance between low and -- you need coverage capacity, which is low band, and you need mid band to high band for capacity. So the answer to that, I think, is, ideally, yes. Your road is much harder without low-band spectrum. I think the FCC recognizes that in the incentive auction. That's why they partitioned a piece of that for smaller companies or new entrants. But I think it is one piece of strategy that's important. By the way, we have 6 megahertz of low-band spectrum, right, in all but 5 cities. So we're not totally in the dark there. Bryan D. Kraft - Evercore Partners Inc., Research Division: Is that going to be usable? Didn't the power requirements go down on that? Charles W. Ergen: We did, we agreed to turn the power limits down to standard wireless power. So we basically had broadcast power. Tom, you might explain that better than I can. Thomas A. Cullen: No, it's just like Charlie said, we brought them down but to a level that's usable as any other wireless spectrum would be used for traditional wireless services. We just happened to have a very high power limit previously, which would look more like broadcast. Charles W. Ergen: Yes, we're at the same power level as Verizon and AT&T low-band spectrum.

We will now take questions from members of the media. [Operator Instructions] Our first media question comes from Alex Sherman with Bloomberg.

Charlie, just a straightforward question for you. Does it make sense for DISH to make an offer to buy T-Mobile? Charles W. Ergen: Maybe. We got to read the analyst report to know. Maybe we'll even read the media. And look, I think we've talked about this. Certainly, to the extent that Sprint either dropped out or wasn't interested or the government wouldn't allow it or T-Mobile wasn't, then T-Mobile is something that we'd have an interest in.

Does it make more sense for DISH to make an offer to buy T-Mobile than partner with Sprint? Charles W. Ergen: Don't know. I think Sprint's -- there's a lot of things I like about Sprint. I think they're really entrepreneurial, they've got a -- they've just got a new CEO who's probably the right guy for the competitive nature -- wireless is going to get very competitive, right? It's going to get -- just I'd almost say you aren’t seen nothing yet, right? I mean I think you have to have a lot of respect for what T-Mobile's done and John Legere and his team have done. But I think Sprint is capable of much, much more, right? They have a better spectrum position, more spectrum. And Dan Hesse did a great job in terms of transitioning that company and basically saving that company and he did a great job in selling that company. But now, they've got the right guy for a war, right? And so I like what Sprint's doing -- or I like what I think Sprint's going to do. I don't actually know -- I'm not on the inside there, but I just think that they've got some pretty good weapons.

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

Charlie, I was just wondering how far you'd be willing to go to achieve your wireless plans? You laid out a vision of everything being in the palm of your hand. Would you ever be prepared to separate the traditional pay-TV business that you built from the wireless business? Charles W. Ergen: Yes, I mean, I think we tried to answer that. If we get to a point where we can't enter the wireless business, and there's just not another good option for us, then we'd separate those 2. That is at the far end of the goalpost of what we think we would do. We would fight like crazy and work as innovative as we could not to do that, but if that was our only option, I mean, then -- we're not suicidal, right? I mean, we have a responsibility to our shareholders. We're ultimately going to do the right thing in the long term for our shareholders. But at least, at this point, based on where we're valued today, we think that we can make a difference in the wireless business and enhance the wireless business with our video assets and enhance our video. Our video is worth a lot more money when you can distribute it everywhere than it is if -- today, we're valued because we can distribute our video in the home. But imagine when we can distribute that video to every handset, every tablet in a consistent, quality-controlled manner in a way, with our programming content partners, that the advertising is interactive and unique to each individual. You start looking at -- hey, just go look at the money that Facebook makes from ad insertions and Google and -- I can't even make it up. I don't know how big the number is. It's just a lot bigger than it is today. And so I think that...

And just on that note, can you elaborate more on that core value floor that you mentioned? You kind of got into that, but is there a current value floor or what is that valued at? Charles W. Ergen: Well, I mean, I think I don't know where the -- I think people probably value our spectrum at half of the network -- half of the equity value of the company, something like that, maybe a little more than that, right? When we go to auction, we'll see whether that number goes up or down. But I'd say it this way. If you're in the oil business, we have the largest reserve of oil in the industry right now. We've the largest untapped reserves in the oil industry, right? So unless the price of oil goes down, we have a floor, which is the oil reserves we have. And you have to spend a little money to drill for oil, you have to spend a little money to use our network. But the price of using our network is coming down, right? In other words, the cost of radios on towers and the way you would do a core today in your network and now you can do a smart core and a little dumber radios, the cost of doing that is coming down. So I don't have -- we have an oil -- we have essentially an oil reserve that has a value, unless people quit using oil. And I think people are going to -- in our case, people are going to use more and more wireless spectrum for the foreseeable future. And I don't know if it's going to double every year, but it's going to go up in terms of usage.

Our next question comes from the line of Brian Fuller [ph] with CMS [ph].

I was hoping to follow up on the OTT, the Web TV product. Can you talk at all about whether it is a per-person service or a per-household service? There have been questions about that because of the A&E announcement versus the Disney announcement. And we heard Jeff Bewkes earlier today say that the Disney approach was directionally the right philosophical approach. Can you say, by the end of the year, when it launches, what it will be? Charles W. Ergen: It's basically a per home, but it's -- it's basically per home, but it's really for everybody watching the same channel in the home, right? And it's kind of how -- really how we started out 1980 in the big dish business. We put a dish in. Everybody in the home watched the same channel. And we call that single stream. That's basically the approach, right? I think that we probably should look at -- that's the way we should certainly start. We should look at the experimentation of that at some point in time. I have a concern that you might be watching ESPN on one -- I came from the South, right? And we have mixed marriages in the South in the sense that somebody went to Auburn and somebody went to Alabama and they're married, right? And you can imagine a case where on ESPN, somebody's watching Alabama and on ESPN2, Auburn's on, right? And so you're going to have a divorce, right, if you can only watch one of those games, because if somebody's going to want to watch one game on ESPN and somebody's going to want to watch the other game on ESPN2. So I think those are the things we have to work through, but that's not where we're starting.

But the notion of each person in the family pays for their own services is not where you'll start at the end of this year? Charles W. Ergen: We haven't made all the final decisions, and obviously, we're talking to our content partners, but I think you would pay by the house and anybody in the house could watch that service -- to watch that...

So in other words, the way you would buy... Charles W. Ergen: You wouldn't have to buy 1 service, one for the bedroom and one for the living room, but you got to watch the same channel, right? If you want to watch different channels you'd have to -- actually, I don't think we ever thought about that. We just don't -- we haven't thought about actually giving you the ability to buy 2 subscriptions.

It would be revolutionary to have one person-one service as opposed to one household-one service. Charles W. Ergen: I don't think we've actually -- yes, I don't think we've actually -- that's an interesting question. We haven't thought of it exactly that way. We have really just thought about the household. What we're thinking is -- look, it's college kids in the dorm, it's people in an apartment, it's young people who don't live the same place all the time, they travel around. It's a variety of people who aren't paying for TV today, and we know that's growing by 3 million, 4 million people a year.

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

I just had a quick question about regional sports networks. You see DIRECTV and a couple of other guys have implemented monthly surcharges to offset the cost. I'm just wondering if that's something that you guys are either thinking about doing or have done. And I have a quick follow-up, too. Charles W. Ergen: Joe, you'd take that? Joseph P. Clayton: I'll take that. We've watched other pay-TV providers. We have no plans at this point in time to have a separate surcharge, but we're always evaluating changes in the marketplace. But at this time, we have no plans to do that.

Okay. I was wondering, too, I mean, in the past, kind of your strategy when there have been networks that you thought were too pricey, you basically just didn't carry them. And there's some talk that you're planning on doing something like that with one of the Comcast RSNs? Is that true? Have you guys just dropped one of those networks? Joseph P. Clayton: Well, the bottom line is if people want to watch it and they're willing to pay for it, we're going to carry it. We are under some negotiations now with several of the regional sports networks. And I'm not going to go into any of the details of the negotiations, but we're not going to offer something that we can't get a return on. And there's been certain regional networks that we have elected not to provide. The LA Dodgers is probably the best example. It's too pricey and it's too limited, and we're not the only providers, pay-TV providers, not carrying that service. Charles W. Ergen: This is Charlie. I mean, I think where you'd like to see the regional sports, that -- as a consumer, where you like to see that go is that regional sports would be an a la carte item that you pay a premium for if you're interested in sports. It's really hard to take a fairly narrow set of sports rights, right? It might be just one NBA team, it might be just one baseball team, it might just be one hockey team, and allocate several dollars a month to all your customer base when only a minority of your -- a very small minority watch that particular channel. So we've seen cases, right, we've seen cases where viewership might drop 50%, and they want a 50% rate increase. That just doesn't make any sense. And I think the Dodgers, rather than make every customer pay for the Dodgers even if you're not a baseball fan, it's not just very consumer-friendly. I think the right answer is to have the Dodgers available for maybe just $10 a month, right? But you have the Dodgers available for those people who want to watch. That's a fair way to do it. And if you don't do it that way, people are just going to go to the Internet and watch it anyway. Or they're going to go to their neighbor's house or they're going to go to a bar or a restaurant and watch it. It's just getting too expensive to -- the day of always ever-increasing prices for sports may be coming to an end. Do you have a follow-up?

Yes, just a quick one. Just it looks like you guys have done a lot of deals with the college networks, and the ones that you have decided not to carry are the pro ones. Are college networks -- do you see them as being more popular, more desirable with your customer base? And are you kind of trying to position yourself as kind of the college sports place to be? Joseph P. Clayton: Yes, based upon our consumer profile, our existing customer base, it is in a lot of the nonmetro markets that would be more conducive for college sports, just look at this Southeastern Conference, for example. The majority of that area doesn't have a lot of pros teams. So we are trying to make our programming offerings for our consumers, for our potential customers, as the destination for college sports. And we're the only provider today that has SEC and the Pac-12 and the Big Ten and the Texas Longhorn Networks, all of the above. Other providers have pieces, but not the whole enchilada.

And our last media question comes from Greg Avery with Denver Business Journal.

Charlie, given the deadline coming up with the -- for anti-collusion and the auction and the events of yesterday, is there -- how likely do you think there's any deal-making, for either T-Mo or Sprint, will go on before the auction? And what would be your strategic priority, would it be the auction or would it be a partnership? Charles W. Ergen: Well, I mean, I think the odds on any big deals prior to the auction are not great, right, unless people really want to do a deal. And most of the time, in deals, people jockey for position for a long period of time. You saw that with Sprint and T-Mobile for a long period of time. And so 5 or 6 weeks is probably not enough time for people to do that kind of thing. If people really want to do a deal, you can do a deal -- I've done a deal on a weekend. So it just depends on the people. But our focus as a company is on the things that we can control, and we can control our participation in the auction. And we think it's something that we will participate in. Again, like I say, we don't normally win very much in an auction. We're just too small. But we will participate -- I think we'll participate.

Okay. Thank you, all, for joining us. Charles W. Ergen: Good bye, thanks.

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