Jason Kiser - DISH Network Corp. R. Stanton Dodge - DISH Network Corp. Charles William Ergen - DISH Network Corp. W. Erik Carlson - DISH Network Corp. Roger Lynch - DISH Network Corp. Thomas A. Cullen - DISH Network Corp. Steven E. Swain - DISH Network Corp.

Amy Yong - Macquarie Capital (USA), Inc. Jason Boisvert Bazinet - Citigroup Global Markets, Inc. Philip A. Cusick - JPMorgan Securities LLC Jonathan Chaplin - New Street Research LLP (US) Thomas William Eagan - Telsey Advisory Group Mike L. McCormack - Jefferies LLC Bryan Kraft - Deutsche Bank Securities, Inc. Kannan Venkateshwar - Barclays Capital, Inc. Marci L. Ryvicker - Wells Fargo Securities LLC Walter Piecyk - BTIG LLC Scott Moritz - Bloomberg News Anjali Athavaley - Reuters News Agency Ryan Knutson - The Wall Street Journal, Inc.

Welcome to the DISH Network Corporation Second Quarter 2017 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session with analysts first followed by the media. As a reminder, today's conference is being recorded. I would now like to turn the conference over to Jason Kiser. Please go ahead. Jason Kiser - DISH Network Corp.: Thanks, Tracy. Well, thanks for joining us. This is Jason Kiser. I'm the Treasurer here at DISH Network, joined today by Charlie Ergen, our Chairman and CEO; Tom Cullen, EVP of Corporate Development; Roger Lynch, CEO of Sling TV; Erik Carlson, President of DISH Network; Steve Swain, our CFO; Paul Orban, Controller; and Stan Dodge, our General Counsel. Like we usually do, we do need to do our Safe Harbor disclosure. So I'll let Stan take care of that. R. Stanton Dodge - DISH Network Corp.: Thanks, Jason, and good morning, everyone, and thanks 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 that 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-K. All cautionary statements that 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. Operator, we'll now open up the call first for analyst Q&A and then media Q&A.

Thank you. We'll go first to Amy Yong with Macquarie. Amy Yong - Macquarie Capital (USA), Inc.: Hi. Thanks and good morning. So, I guess, two questions. First, obviously there has been some headlines around SoftBank and Sprint. Obviously, you've tried to buy Sprint in the past. I'm just wondering if you could talk more strategically about maybe what has changed, what you might be looking for this time around. And then my second question is on churn. Obviously, it was much better than I think a lot of us expected. How do we think about churn going forward, particularly with Sling TV, where the characteristics of churn might be a little bit higher? Thank you. Charles William Ergen - DISH Network Corp.: This is Charlie, Amy. I'll take the first part before I give it to Erik to talk about churn. Obviously, we're not going to – we're kind of the one – probably the one company that doesn't really respond to rumors, and we usually don't, as you know, leak things to the press. So we will just continue that tradition of not commenting on things. What I would say though is that I think that it's probably a better regulatory environment today than it has been over the last decade, really. So it's probably a two-year window where I think a lot are probably going to be increased. There's going to be increased M&A and things beyond what it probably was in the past. And so I think that the communications industry – you've probably seen it in the content industry, I think you'll see the same thing in the communication industry. And we're not the biggest player out there. So we're probably not the one that's was going to be driving that train. Erik? W. Erik Carlson - DISH Network Corp.: Hi, Amy. This is Erik. I guess first-off, we generally don't provide guidance looking forward. However, what I would say is, I think we're encouraged with churn and non-pay is running at a multiple-year low. I think we've talked about in the call before, there's probably three things I'd point to: one is definitely have a lot more discipline in place, from an acquisition perspective to look at acquiring customers that will be profitable and obviously, will be with us on a long-term basis. And in addition, I think our sales strategies have been more effective than they have in the past. Some of that has to do with the work that we're not solely focused just on providing a credit for our customer or rightsizing them into a package that meets their needs, whether that's with Flex Pack that we've talked about before on the call, or whether that's through other tactics, whether it's renewal or upgrade, et cetera. So just trying to meet the customers' needs and finding a package and equipment that's right for them. Then in addition, I'd say, obviously, there has been some operational improvements, we're executing better at a front-line level, both over the phone and face-to-face when one of our technicians is at the door. So, I think the combination of those three is encouraging for us from a churn perspective looking forward. I'll let Roger comment on Sling growth, if there's a question there. Charles William Ergen - DISH Network Corp.: No, we will wait for a question. Roger Lynch - DISH Network Corp.: I didn't hear the question on that.

Great. Thank you. And we'll go next to Jason Bazinet with Citi. Jason Boisvert Bazinet - Citigroup Global Markets, Inc.: I just have a question for Mr. Ergen. Your neighbor there in Denver, Dr. Malone, seems to spend a lot of time going from net asset value stories and converting them into operating businesses and you've sort of gone, and I would say successfully, backwards, to essentially taking a stock that the Street values on cash flow and now values on spectrum. My question is, do you spend much time thinking about how that handoff can successfully occur as you stand up sort of a stand-alone business and the Street has to value, again, cash flows? Because I don't think there's any company that has a pile of spectrum where the Street values the spectrum discretely. It doesn't happen for Sprint or Verizon or T-Mobile or anyone, really. So can you just talk about that? And do you think about that? Charles William Ergen - DISH Network Corp.: Well, I mean, I think about it. I think that any value of a company ultimately is going to be dependent on just get your cash flow. So, the company is not worth anything unless you can generate cash out of it. Everything that we do that we think about strategically is longer term in nature and in terms of – in this case, building assets that we think are going to cash flow a lot of cash flow in the future. But you first have to – in our case, we have to – as we said, we want to become a connectivity company. One of the ways we had to do that was – the only way we could see how to do it was in the wireless side of it. And the government had auctions. They weren't necessarily on our time schedule, but when the auctions happen, you either play or don't play. So we've been obviously the largest participant in the government auctions over the last three to four years, so. And we recognize that our core business is a mature, it's a declining business, which is why Roger came in to start Sling and why Erik and his team are pretty disciplined about where they spend money in acquiring new customers because we want only long term. We don't want customers for a year or two. We want customers that are net present value positive. So that's how we look at it. Obviously, for us to have to increase the value of our company, we will have to put those assets to use and they'll have to generate cash flow. But that's not something that you can snap your finger, in technology that's not something you can do in six months. That's going to be a long-term process for us. And you look – in technology, it's usually timing, it's usually the critical factor. And in our case, 5G is a paradigm shift within the telecommunications industry for a variety of reasons and that's really kind of a 2020, and this means standards are not even set yet. So the standards have to get set and then you've got to get product out there. So you're realistically looking at 2020, 2021, 2022 to actually implement spectrum on a basis that uses the latest technology. And I don't think you want to spend a tremendous amount of money on last year's technology. So that's how we look at it. So again I don't think it's any surprise to be an investor in DISH, you've got to have a little bit longer term horizon. Jason Boisvert Bazinet - Citigroup Global Markets, Inc.: Understood. Thank you.

And we'll go next to Philip Cusick with JPMorgan. Philip A. Cusick - JPMorgan Securities LLC: Thanks. So I guess the first one for Charlie and Roger, what's the attractiveness of the OTT ecosystem, given all this new competition? Can you talk about where you are as well on the advertising ramp in this business, Roger? Roger Lynch - DISH Network Corp.: Sure. Yeah, it's Roger. I think you hit it on the head, Phil, which is the advertising side of it is an important element because what OTT does is it enables a new form of advertising, which is entirely targeted, and which targeting in effect just eliminates waste. So, advertisers are able to reach the people they want to reach without having to spend people they don't want to reach, therefore they're willing to pay more per impression, significantly more per impression for those ads. And so that's always been an important part of our business case. And that part of our business is ramping. As I said before, the technology to implement that was harder than we expected. It took longer than we expected. But we think we have it cracked now. So now, it's just a matter of we're continuing to expand the number of networks on which we have enabled dynamic ad insertion and our ad sales team is doing quite a good job sort of selling those and getting strong CPM. So it is an important part of it for our business. In terms of the overall attractiveness, I think if you look at what's happened with all of the competitors that have entered, what they have largely done is replicate the big bundle that the Pay-TV industry already provides. So either that's one bundle of channels, no choice, take it or leave it, or it's the nested model of big, bigger, biggest that some of the competitors have done, which looks a lot like the traditional Pay-TV bundles. That was never our strategy. Our strategy was never let's just replicate what Pay-TV does over the Internet. It was let's create more flexibility, and let's go after a different segment, people who are rejecting traditional Pay-TV, cord-nevers, cord-cutters. And we knew that price was an important part of that. We also knew that over the air antennas fit into that importantly, because that was a growth market, people using antennas and Netflix as a good cord-cutter solution. And so when we originally thought about Sling, we thought about it fitting into that ecosystem. And today, I think it really provides us with a competitive advantage over everyone else who is forcing you to buy locals and big bundles of channels versus our more flexible packaging. Philip A. Cusick - JPMorgan Securities LLC: And Roger, can you give us an idea of what sort of portion of revenue is coming from advertising at this point on Sling revenue? Roger Lynch - DISH Network Corp.: No. We don't break that out. Philip A. Cusick - JPMorgan Securities LLC: Thought so. Thanks. Roger Lynch - DISH Network Corp.: But the important part is not the portion of revenue, it's obviously the portion of margins. The margins on advertising are quite good. Philip A. Cusick - JPMorgan Securities LLC: Understood. Thanks. Charles William Ergen - DISH Network Corp.: This is Charlie. I think it's fair to say that advertising will be a bigger portion of revenue and margin and OTT than it is in Linear TV. Roger Lynch - DISH Network Corp.: Yes. Philip A. Cusick - JPMorgan Securities LLC: Charlie, can I follow up? Charles William Ergen - DISH Network Corp.: Yeah. Philip A. Cusick - JPMorgan Securities LLC: I was going to say, in Linear, has your view of Linear changed as the OTT system has broadened? Is it less attractive to compete in linear now given that people have so many more choices? Charles William Ergen - DISH Network Corp.: The way I think we started looking at it was that when you're spending $800 SAC to get a Linear TV customer, that was pretty easy to do back in the day when the customer life cycle was going to be 7 or 8 or 9, 10 years, and the customer's only choice was to go to an inferior cable product, right? Now the customer has multiple choices. First of all, cable product is much better. He's got a phone company and there's half a dozen pretty good packages out there, from an OTT perspective. So now a customer really has about 10 different options, right? So I think it's realistic to assume that a Linear customer today that you might get on randomly across the United States, the odds on that customer lasting 7 or 8 or 9 or 10 years is probably not good. So we just look at it and say, we have to knew that over the air antennas to get them. We have to be willing to focus on areas that may be not as many options for the consumer, right, rural America is an example, and be a little smarter about it and then bring in the new technology of OTT where the churn is going to be higher, but the SAC is going to be very low, and where you have an enhanced revenue opportunity with advertising and add-ons and everything else. So I think we just change with where the market is going. And in our case, in Roger's case, he's actually leading the market there. And I think that we – when Roger – when we talked to programmers five years ago that was a new concept. I mean, I think today they all – I don't think you would hear a lot of disagreement with what I just said. And so the advertising model can get better and the Linear – the programmers would like their advertising models to get better and we have technology in ways to make that better on the OTT side, but we have some technology on the Linear side to make it a little bit better too as well. So we're doing both those things. Philip A. Cusick - JPMorgan Securities LLC: Thanks very much, guys.

And we'll go next to Jonathan Chaplin. Jonathan Chaplin - New Street Research LLP (US): Thanks. A quick question on the opportunity on the OTT business, I'm wondering if the OTT opportunity as you see it, would that be something that would use all of the spectrum resources that you have? Or is there a scenario where you could build out a phenomenal OTT business and there'd still be opportunities to partner with existing carriers, with other parts of your spectrum to provide capacity to those businesses? Charles William Ergen - DISH Network Corp.: I'll take a shot at it, and Roger if you want to jump in. Roger Lynch - DISH Network Corp.: OTT or IoT? Charles William Ergen - DISH Network Corp.: You are talking about OTT, right? Jonathan Chaplin - New Street Research LLP (US): IoT, I'm sorry, no, no. I am talking about IoT, Internet of Things. Yeah. Charles William Ergen - DISH Network Corp.: Yes, okay. So this is going to be a long-winded – in IoT, this is my belief is that IoT is going to use a tremendous amount of capacity, but it's going to take a bit of way to get there. Today's current IoT is narrowband IoT, machine IoT, it's still 4G, it still doesn't have some of the enhanced characteristics that are coming with 5G, things like URLLC, which is Ultra-Reliable Low Latency Communications, right? So there's kind of a phase, what I would say, a phase-in where, for us, Phase 1 with narrowband IoT, we won't use a lot of our spectrum in narrowband IoT. Phase 2 as you get into 5G and you get into all the things you can do with comms, vehicles, and healthcare, industrial and municipalities and everything else that you can do in millions of machines with low latency, that's going to use a tremendous amount of capacity. And there's some use cases that would use way more capacity than we have. There is some use cases that would use less and obviously, the FCC is doing a really good job of trying to – and the Congress is finding other places that just – to have another sub inquiry in the 4-gig, 3.7 to 4.2 C-band area. All those things are going to be important. But IoT in general, at least it's my belief, is going to use a lot of spectrum, a lot more than people think. But the first phase of our build-out, which Tom maybe want to talk about, and narrowband IoT will not use massive amounts of spectrum. You want to add to that, Tom? Thomas A. Cullen - DISH Network Corp.: I would just say we're making – we've got a growing team dedicated to the build-out of the IoT network. We're currently negotiating contracts with the radio access vendors. We've completed the preliminary RF plan for each of the license areas. And we're in discussions with the tower companies and other partners. So we're fully aware of the build-out of March 2020. And we intend – we fully expect to meet that construction milestone for both AWS-4 and the E Block by that date. Jonathan Chaplin - New Street Research LLP (US): And Tom just to follow-up on that. As you move from that first phase of narrowband IoT that doesn't use a lot of capacity, to the second phase where you're leveraging 5G and there could be a demand for huge amounts of capacity. Can you do that second phase, sort of, organically on your own? Or at that point, do you either need a partner with one of the existing wireless carriers, or maybe somebody who's got really dense fiber infrastructure, in order to really capture that opportunity. Thomas A. Cullen - DISH Network Corp.: Well, it's a little premature to answer that as to what the industry looks like in three, four or five years. Right now, we're just laser-focused on getting the initial deployment completed and continue to have discussions with various parties in the industry. Charles William Ergen - DISH Network Corp.: Yeah. And this is Charlie. I'd only add that you realize that we have nationwide 600 megahertz spectrum now, which is a great low band frequency, which is really a necessity in my opinion for a lot of the use cases of IoT. We can't actually use – we can't use that nationwide frequency, because there's still 38 months that the broadcasters have before they have to turn it over. And they're asking for more time at this point in time. So unfortunately, that's kind of after our 2020 schedule for the FCC. And then we're still involved in litigation on some of the AWS-3 spectrum. We're still awaiting court decisions on that. So that's a bit tied up in terms of us making long-term strategic decision. So it just so works out that we're really – it just makes logical sense to go with a narrowband IoT and wait for 5G where we'll probably have some specs and some time we'll probably have some specs in 2018 and we can start planning that network. And hopefully the second phase will come along as soon as 5G is available. And it's realistic to assume, I think, that we're going to need some help. And we need help in doing that both in technical knowledge and know-how and financial and everything else because just like we needed help to launch satellites. We launched our first satellite in 1995, and I think we've launched 21 or 22 satellites now. We needed a lot of help to get there, and we're not afraid to ask for help. Jonathan Chaplin - New Street Research LLP (US): Great, thank you.

And we'll go next to Tom Eagan with the Telsey Group. Thomas William Eagan - Telsey Advisory Group: Great, thank you. I have a question on margin trends. In the subscriber-related cost line, if you back out the $60 million in broadband costs this year and last year, the margin there declined pretty materially. So I was wondering how much of that is due to higher programming costs, and how much of that is because of the lower margin from Sling? Thanks. Charles William Ergen - DISH Network Corp.: You want to take that? Roger Lynch - DISH Network Corp.: Sure. Yes, Tom, it's a little bit of both. And so certainly, we're under some relatively intense margin pressure from our programming partners as well as just given the way Sling is currently priced, that is a lower gross margin product just because it has a lower ARPU. Thomas William Eagan - Telsey Advisory Group: Right. Roger Lynch - DISH Network Corp.: But what we're focused on is cash flow. So we are laser-focused on driving cash from both the DBS business and we have the opportunity to have margin expansion in the Sling business. So on the DBS side we're certainly focused on acquiring and retaining higher quality of customers and we're doing that by focusing on more rural geographies where we have less bundling pressures. We're more disciplined on retention credits as Erik has already mentioned, and we are executing on several meaningful costs and revenue initiatives. And in order to offset some of the intense programming rate pressure, we are rightsizing our customers through some of our skinnier packages like Flex Pack. And we are also offering some integrated Hopper antenna solutions where customers can drop their locals and they can save money as well as, we'll as a company save on lower programming expenses. Thomas William Eagan - Telsey Advisory Group: Right. Okay. In terms of broadband, should we expect that the incremental costs there are going to continue and what is the market potential of that business? The subscribers appear to be declining quarter-over-quarter. So how big could that business be? Thanks. Roger Lynch - DISH Network Corp.: So just to remind you that in the first quarter, we entered into an agreement with Hughes, which allows us to market and install the Hughes broadband service. Hughes will make certain payments to us for each sale and installation. Subscribers acquired, however, under this agreement, are going to be Hughes-branded retail subscribers and therefore, not included in our subscriber numbers. So as a result, our broadband subscriber count related to the Hughes service will decline through customer attrition. Charles William Ergen - DISH Network Corp.: That also affects the – that also affects – that's the biggest thing you see in the margin on the broadband side is that we don't have the SAC to acquire the customer. So we're getting a – so we have lower margin, but we don't have the SAC because we're just an agent for basically for Hughes, and we sell the product and get a one-time commission. So we don't have the margin that we had before, but we don't have the SAC. So from a P&L perspective, I think you'd probably say we feel like we're relatively indifferent which way we would do it. Roger Lynch - DISH Network Corp.: Right. So as we pivot away from this wholesale model, we will see modest P&L favorability due to lower acquisition costs. Without ownership, owner economics, we just couldn't make the wholesale broadband business work for us. So we think this is a... Charles William Ergen - DISH Network Corp.: Well, it worked. It just wasn't the best use of – it wasn't the highest return on our capital. We had other places to put our capital. Roger Lynch - DISH Network Corp.: That's right, I think it's the right time to pivot away from that strategy. Thomas William Eagan - Telsey Advisory Group: That's right. Should we expect the cost for that, for broadband are going to continue or not? Roger Lynch - DISH Network Corp.: Net margin, you'll see a very modest benefit to the P&L. So we'll have lower revenue, but also lower cost – in that margin benefit, modest. Thomas William Eagan - Telsey Advisory Group: Okay. All right. Thank you.

And we'll go next to Mike McCormack with Jefferies. Mike L. McCormack - Jefferies LLC: Hey, guys. Thanks. Charlie, just to comment on some of the carrier behavior out there, we've heard Verizon specifically talking a lot about small cells. How much of that is a risk to overall needs and desires for spectrum? And then maybe just a comment on the industry's health in wireless generally speaking, whether or not potential cash flow pressures on pricing down will also dampen the need or the ability, rather, to acquire spectrum? Thanks. Charles William Ergen - DISH Network Corp.: Yes, I don't know if I got the second part, but the – I think each carriers offer a little bit different strategy today. I mean, obviously AT&T is getting more heavily into the content side of the business. Verizon's got more of a small cell strategy and T-Mobile is just taking away a lot of the pain points that are out there. So each have strategies that those guys are a lot more knowledgeable about the wireless business than I am, so each of the – there's no reason that each of those strategies can't work. Some probably are going to ultimately, history will show, will be better than others. But I think my general opinion is that that you're going to need kind of everything. You're going to need small cells, macro cells, I think satellite is going to play a part in connectivity. And in satellites, it's going to be GEOs, MEOs and LEOs. And those are all going to fit together in a system, because each customer is going to be a little bit unique. Sometimes they're going to be in a home in a city. Sometimes they're going to be in a vacation home in rural America. Sometimes they're going to be in the car. Sometimes they're going to be in an RV. Sometimes they're going to be in a boat. Every one of the – sometimes they'll be in an airplane, and each of those is going to have different connectivity needs. And so I think for our company, we're going to fit – we're going to go where we think our assets fit the best and where we can make the best return. And it's going to be part of that ecosystem and we're not going to do everything. And I don't think that Verizon and AT&T are going to do everything either. But we'll focus on the connectivity and all the kind of peripherals and all the kind of layers on top that goes with that. So sometimes that's – but a lot of that is going to be video – in our case, a lot of that's going to be video. Mike L. McCormack - Jefferies LLC: Right. Charlie, then just a quick follow-up on the cable entry into the industry, does that change your view on the industry overall and your desire to do what you're doing, more strategy stuff? Charles William Ergen - DISH Network Corp.: The cable industry? Thomas A. Cullen - DISH Network Corp.: Cable entry. Mike L. McCormack - Jefferies LLC: The cable players coming in. Charles William Ergen - DISH Network Corp.: Well, look, I think there's probably – I think the wireless business is already competitive. It's going to continue to be competitive. I think you're going to see cable industry in the business because they're connectivity companies too. And so they're going to be in the business. Probably I think a smart strategy of starting out with an MVNO strategy, but ultimately, they're going to want bandwidth and economics and the data and all the things that go with it. And they're probably going to enter the business sometime in a bigger way. And you probably also have other entrants potentially where people who rely on connectivity for their revenues. So you're starting to have $500 billion companies out there whose revenue is just materially dependent upon connectivity, and they don't control any of that connectivity. In some point in time, they're going to take out insurance policies to make sure that they have a little bit more control of that, so you're going to have some dynamics that change in this industry. And we're going to have to – we're somewhat fortunate that we have more of a clean sheet of paper to just start with 5G and just start with what a network should be in the 21st century. So it's not built just on voice. It's built on machines, machine to machine, it's built on IoT, it's built on broadband and connectivity. And voice is just an app in that. Where most networks today were really built for voice, and they've added all the others – trying to add all the other stuff on top of it, and that makes for a more complicated and more costly network than I think we can do. Mike L. McCormack - Jefferies LLC: Great. Thanks, Charlie.

And we'll go next to Bryan Kraft with Deutsche Bank. Bryan Kraft - Deutsche Bank Securities, Inc.: Hi, good afternoon. Good morning, out there. I want to ask you, Charlie or Tom, just how your high-level thinking has evolved with respect to the range of strategic options for the wireless business, and how just directionally, the probabilities may have shifted over the past 6 to 12 months in terms of what types of companies you think you might end up partnering with as far as wireless incumbents or large tech companies, international players, cable, et cetera? Thomas A. Cullen - DISH Network Corp.: Let me just comment first, and then I'll turn it over to Charlie, but it's also relevant to the last question. I think the focus on today's competitive landscape is really just around smartphones and tablets, right? The average smartphone probably consumes, I don't know, 5 gigs a month. Use cases that are being discussed around 5G that will start to materialize in the early 2020s, they're going to dwarf that in terms of the amount of data consumed whether that be drone network or autonomous vehicles or healthcare or massive connectivity. So to look at the marketplace in terms of today's four big competitors and the new entrants, I think you have to really think about how the market will get redefined in the next five years to seven years to ten years. Charles William Ergen - DISH Network Corp.: Yeah, I think there'll be some catalysts for how the marketplace is going to go. And again, we're not the biggest player. So we're probably not the guys driving that. But I think there's a relatively good chance that the current incumbents try to go from four to three. I think there is a very good chance that the cable industry decides to get – to play bigger rather than smaller ultimately. And I think there is reasonable chance that people who rely on connectivity will want to advance connectivity in any number of ways. They may or may not use technologies that are – may or may not use things that incumbents have today. So, all those things are going to happen. The only thing I know for sure is that if you're born today in the United States, you're probably not going to have one second of your life you're not connected. And you're going to use a lot of data during your lifetime. And there's going to be – and that's just people. And every microprocessor and every light and every other thing is going to have a sensor that's going to be connected. And that's just – it's going to make us more productive. And it's going to save companies money. And so there's going to be very large companies coming out of the connectivity business on a big scale, and we hope to play a part in that. Bryan Kraft - Deutsche Bank Securities, Inc.: If I could just follow-up on that. There's been talk obviously of some of the large tech companies getting into the connectivity business, particularly with this next phase of the industry that you had talked about. Do you get a sense that that interest is real and that maybe some of those players are actually taking a hard look at it? Charles William Ergen - DISH Network Corp.: Well, I mean I think you see – I think you've seen Google Fiber try for connectivity. I think you've seen Project Loon with balloons and things. I think you've seen Facebook with high-flying vehicles. So I think Amazon is looking at drones for delivery. So, you're looking – they're all around it. You're looking at Microsoft with White Spaces and things they're talking about. So they're all around it. And I think they're looking for new and creative ways to provide connectivity. But at the end of the day, that – you're going to need a core – there's going to be some unlicensed spectrum and licensed spectrum, but you're going to need a core layer of how you connect. And I think that the four big incumbent carriers are pretty well positioned there. And I think we're pretty well positioned there too, because we're a cleaner sheet of paper. So, you don't have a lot of complexity and baggage of the old things. But there's a handful of – there's three or four companies that could peel off some money off the balance sheet and go buy incumbent carriers out there with maybe a little bit more than pocket change. But they could do it if they want to get it in a big way. So, we'll have to stand – we'll have to see how it goes. But I don't think you're going to be a very good company if you don't have tremendous connectivity going forward. Bryan Kraft - Deutsche Bank Securities, Inc.: Yeah. Thank you.

And we'll go next to Kannan Venkateshwar with Barclays. Kannan Venkateshwar - Barclays Capital, Inc.: Thank you. So Charlie, couple of questions, first on the build-out requirement, what gives you confidence that the present FCC will be okay with an IoT network in the end state and – because your investment plan is obviously defined by that. And secondly, there is a comment in the 10-Q where you talk about significant new investments for the network and so on. Is it just a continuation of the same comments you've made over the last couple of quarters, because the comment seems to be new. Thanks. Charles William Ergen - DISH Network Corp.: Yeah. Well, I think there are rules for what – for your build-out and there's rules for our spectrum in terms of how to bring that into service. And we're – it's not, the rules don't limit you to voice or data or IoT or whatever but – and then there's a practical thing which is, you've got to – so, IoT's going to be a real business. You've got to start, there's nobody who's got a nationwide IoT – narrowband IoT business today. We're pleased to see that T-Mobile's also going to start building the business. I'd expect that maybe others will as well. Certainly, people around the world are looking at it. So, it's a real business. It's a real net necessity. It's a real productivity increase for any number of constituents in the United States. So it makes a lot of sense. But we also have a practical problem, which is our nationwide 600 megahertz spectrum is not available for us in the timeframe that we have to meet our first deadline. And we're still in litigation. We believe we had followed the rules on the AWS-3 Auction, but that's in litigation today. Still to find out whether the FCC's decision was the right one, to deny us, to deny our partners the bidding credits. So it makes it difficult to plan when you have that much uncertainty. So all those things are going to – all those things should get cleared up in the 600 megahertz spectrum should come available, about the same time that 5G becomes available as well. So it just makes sense to do it in two phases, and that's what we're doing. R. Stanton Dodge - DISH Network Corp.: And this is Stan. To answer your second question, the disclosure is effectively the same quarter-over-quarter. Kannan Venkateshwar - Barclays Capital, Inc.: Okay. Thank you.

And we'll take our next question from Marci Ryvicker with Wells Fargo. Marci L. Ryvicker - Wells Fargo Securities LLC: Thanks. I'm just kind of following on Bryan's question. Charlie, you mentioned Facebook and Google. You didn't mention Amazon. The papers mentioned Amazon, and the investors have mentioned Amazon. So anything you can comment with regard to Amazon would be great. And then Steve, two quick ones for you just as it relates to cash flow. Can you talk anything about maybe cash taxes for the year and how we think CapEx should be trending? Thanks. Charles William Ergen - DISH Network Corp.: Well, I mean, I think Amazon is one of those $500 billion companies that probably have to think about connectivity in their future. They have three main businesses, right? So their cloud business doesn't work unless it's connected. And that cloud business is connected by fiber a lot of times, but it's wireless too. And so they don't make any money if that's not connected. And their retail business is going to – future delivery is going to be drones or autonomous vehicles. Both of those are not connected, so both of those are going to need connectivity. And then they have a big video business now. And that video business lot of times, is watched on mobile devices. So, you need connectivity for that. So I think they have to – look, I don't have inside information here, but they have to look at connectivity as part of their future. They may be able to do that if they could just peel off some money and buy one of the incumbent carriers, or they could lease spectrum, or they could just hope that the – I think everybody in – the really big companies have always assumed there's going to be a connectivity network out there that they can piggyback off of. And I think that if net neutrality rules get more defined, and I think you're going to find that it's maybe not quite as – you're not going to be quite as confident of that in the future. You can't have all the profits going to three or four companies and have the guys that are – the companies that are providing them the raw material to make that money, not get wake up one day and get a little smarter. That'd be my guess, but I don't know if that's going to happen. But at some point, all the money going one direction, a lot of people are enabling that. They're going to wake up and say maybe they should get – I've been through this business long enough to know that the money ebbs and flows between distribution and content. It's probably going to continue to do that today. And a lot of the content companies, probably the distribution guys, probably are going to be in position to get a more of it. Then it may go the other direction. Steven E. Swain - DISH Network Corp.: And Marci, your question is related to cash flow. So, I'll take a quick step back and talk about total cash flow. Just to around out DBS, I talked about the DBS margin. And as an offset to the DBS margin pressure, we are certainly spending less CapEx by using more remanufactured boxes, and we expect that to continue. And then looking at Sling TV, we believe that we will see margin and ARPU expansion as the business gains scale. So, Roger already mentioned it, but I'll reinforce that we have not yet fully monetized Sling's addressable advertising opportunity. And dishNET, I mentioned, is going to be a modest – it's going to have modest favorability on the cash flow side due to lower SAC. One partially offsetting the cash flow need is with the incremental debt, primarily from low coupon convertible bonds, our cash interest expense in Note 4 is up on a year-over-year basis. And lastly to answer your question on cash taxes, without a sizable taxable gain on derivatives from the last year, lower 2017 pre-tax income, higher bond interest deduction, and planning for the incremental tax deduction from amortizing our newly acquired 600 megahertz licenses, we expect to pay significantly less cash tax in 2017, probably just state taxes. R. Stanton Dodge - DISH Network Corp.: Operator, I think we have time for one more question from the analyst community before moving on to the media.

Okay. Thank you. We'll now take our final question from the analyst community. And our final analyst question comes from Walter Piecyk with BTIG. Walter Piecyk - BTIG LLC: Thanks. Just a quick follow-up, Tom, I think you had talked about you have a network plan now. You have the number of cell sites that that network plan includes? Thomas A. Cullen - DISH Network Corp.: Of course I do, Walt, but that's not something we're going to discuss, first of all. And then secondly, the standards around narrowband IoT continue to evolve. And so the ultimate tower count may be modified even lower, depending on how that standard develops. Walter Piecyk - BTIG LLC: Got it. And I just want to ask you guys the same question I asked T-Mo, which is that if you look at – Charlie, you obviously bought a ton of spectrum. So you carefully thought about relative value of the spectrum and whatnot. If you look at 2.5, is there a minimum amount of 2.5 spectrum you think that you would need to have for it to be useful? And if so, like how much is that? Is that 30 megahertz, 40 megahertz? And how would you look at that, the value of 2.5 spectrum relative to some of the recent auctions that have occurred, higher, lower, same value? Charles William Ergen - DISH Network Corp.: It's Charlie. We looked at it several years ago when we looked at Sprint. And obviously, it was – I think the market had a much lower price on it, so we were confident that the kind of value that we bring on today, I think we haven't really looked at it recently. It's got a couple of things, one is TDD. So it's a little bit different. So you would need some critical mass of that spectrum to be relevant. And then I think the second thing is you've got to look at what the CBRS, potential spectrum of the 3.5 range. And now with the 3.7 to 4.2 going on public on notice of inquiry, I think the FCC just might have just passed it yesterday or today even. That will have some impact probably on the 2.5, but we haven't really looked at that. So... Walter Piecyk - BTIG LLC: Do you support T-Mobile's view of CBRS, which is I think they wanted more license than I think what the FCC is currently progressing with, at least under the Democratic plan? Charles William Ergen - DISH Network Corp.: Well, it's a little tricky because the more changes you make to the – to where they are today, the longer it takes to get that spectrum to you. So, we really haven't weighed in on that because you're balancing the need to get it sooner versus perhaps some of the ideas that were floated including ones by T-Mobile and others that might have some merit, that might take a little bit longer to get out there. And then I think it's also relevant that you should look at in context of what you might be able to do in the 3.7, 4.2 range. So I think those things kind of all go through it. Again, if I was looking at it as a system design guy, I'd look at all that together and say, how do I fit all those things together and try to keep innovation going, but also get money for the treasury, but also at the end of the day, make sure that we can use things to be more productive as a country and raise their base standard of living because we're more productive because of all the things that we can do with being connected. So, we really haven't weighed in on that one yet, Walt. Walter Piecyk - BTIG LLC: Charlie, just greenfield, just as a kind of follow-up on, if I look at DIRECTV's core satellite business, I think losses in their core satellite business went up like 7x year-over-year. DIRECTV NOW helped to mitigate the losses by a decent amount. I realize you don't break out between Sling and DISH on the satellite side. But just wondering, with all of this competition, not just from DIRECTV NOW, but YouTube TV and others, is that eating into your growth year-over-year in Sling, or is Sling actually accelerating due to that lower price point that Roger talked about? Charles William Ergen - DISH Network Corp.: Well, I mean, I think it remains to be seen. More entrants in the OTT they're going to take market share away. That's the bad news. The good news is that people will become more knowledgeable about the category. And so you have a chance – that the category will grow. So if you have something unique, if Sling can be unique and deliver the technically sound service with a great user interface with programming packages that appeal to people then they have a chance to grow. As an example, we don't have ESPN today in one of our packages. But everybody else has got ESPN in their packages. So while you guys write about this all the time, I don't know what your number is. But I think you guys have said something like 75% of people don't see a need to pay for ESPN. I don't know, something like that. Well, when all the packages have ESPN you've turned off 75% of the people. So Sling is in a position to maybe have some things differentiated from – so we have to look at that, beside it remains to be seen. And Roger will have to run his business and be creative, and take advantage of those things, right? Walter Piecyk - BTIG LLC: But is Sling still adding more subs this year than it did last year? I mean, is it still in that growth mode of acceleration? Charles William Ergen - DISH Network Corp.: Well, that remains to be seen too because we'll have to see how the year turns out. The one thing that there is with OTT that does not to the same degree, it is a bit more seasonal business, and the sports stuff is really seasonal, right? And HBO is really seasonal. So people trade in and out. So people will buy for Game of Thrones and watch it for a month and then turn off the service and people will buy for sports. They'll buy for baseball season or football season and then turn it off. So my gut feel is that OTT is still in its infancy, and it's going to see a lot of growth ahead, and Sling included. That'd be my guess, and I think it's going to... Walter Piecyk - BTIG LLC: Thank you so much. Charles William Ergen - DISH Network Corp.: Yeah, all right.

We will now take questions from members of the media. Our first media question comes from Scott Moritz with Bloomberg. Scott Moritz - Bloomberg News: Great. Thanks. Charlie, at the beginning at the call, the onset asked about M&A and you said you couldn't comment. But you also said that you saw the activity picking up in the next couple of years. And you noted that with some resignation about not really being in the driver seat. So wondering how you see Direct DISH's role in this M&A scenario that you've outlined here? Charles William Ergen - DISH Network Corp.: Well, I don't know that I – I don't have any resignation about it. I think that the – I look at it that you probably have a better regulatory environment for M&A. And you've got that for at least you could make decisions in next two years and probably feel better about the regulatory environment than you probably had in the last nine years, right? So, I would expect that most companies and boards are looking at things that they can enhance their business. Because one of the reasons that you don't do M&A is because you feel like regulatory might be an issue. And you can't take the risk to your business of getting turned down or the breakup fees. So I just would think that there'd be more M&A activity. And normally, there's a catalyst in that, right? And normally, that catalyst is somebody does something and then for every strategy, there's a counter strategy. And so somebody else says. if we're going to do that, I need to fill in a few holes in my company over here. I've got a chance to get bigger this way. And AT&T did that on the – it was kind of a catalyst on the content side. And I think that you probably see something and now you're seeing some stuff in the content side with Discovery and Scripps. So I think you've kind of got some things going on the content side. And I think you'll see the same thing that will start happening on some of the networks. There's logical moves that boards are probably talking about. And my gut feel is that we'll be involved in some of those conversations over time. Whether anything make sense to our board? I have no idea. Scott Moritz - Bloomberg News: You said that you'd be less in the driver's seat I think that is the notion you were expressing there. Why would you be less involved with those decisions? Charles William Ergen - DISH Network Corp.: Well, we're probably not going out and buy Verizon or AT&T tomorrow. So those guys can do a lot more than we can do. They just have more flexibility in their balance sheet and they're just a lot larger. So I think the way we look at it is, we're really interested in what we can do, what we can control. We know that we control our own destiny for building out our network to meet our obligations to the FCC. We know that the things that we want to do to enhance shareholder value would be long term in nature, not short term in nature or we prefer to be long term in nature, not short term in nature. And we have a vision of connectivity I think that includes – it's much broader than most people are thinking about today. And we think we have a lot of the building blocks that make that happen. And so, we think there's going to be like-minded people out there that want to get there the same way. And those are people you want to work with, and that could have absolutely no M&A activity. It could just be partnerships. Thomas A. Cullen - DISH Network Corp.: But don't confuse the answer. Charlie wasn't saying that he personally wouldn't be in the driver's seat or involved in the decision-making. Scott Moritz - Bloomberg News: Right. I don't think I'd ever get that mixed up. Thank you. Charles William Ergen - DISH Network Corp.: All right.

And we'll go next to Anjali Athavaley with Reuters. Anjali Athavaley - Reuters News Agency: Thanks for the question. Charlie, I wondered if you could address whether there have been talks with Amazon on potential involvement with the IoT network so far? Charles William Ergen - DISH Network Corp.: No, I can't address that because we keep our conversations private. So you're certainly welcome to ask them. I think Roger can comment maybe a little bit on Amazon because we're doing a lot with them. Roger Lynch - DISH Network Corp.: Sure. Yeah. I mean, there's a lot of touchpoints between our businesses, including running some of our infrastructure in AWS to partnering with them on Fire TV and the things we do on the DBS side with Alexa integration and installing TVs. So there's quite a lot of touchpoints with Amazon across our organization. Anjali Athavaley - Reuters News Agency: Got it. And just going back to the comment on the $500 billion companies that may want increasing control over connectivity. I mean, do you view that as something that could happen this year? Or is it more something 5 to 10 years out as 5G evolves? Charles William Ergen - DISH Network Corp.: You'd have to ask them. And don't get me wrong, I think they have worked a lot at figuring out how to kind of build it organically. So I think they're going to be in the connectivity business. But Microsoft has just talked about white spaces. That's a different way to do connectivity than maybe some of the wireless incumbents or cable companies do it today. Other people, we've seen drones and blooms and fiber builds and things like that. So they may want to grow that organically, right? But I think they have to be thinking strategically, and their boards have to be thinking strategically, about how you increase your connectivity. And I can't remember what Facebook calls it. But Facebook, to grow over 2 million subscribers, they have to have connectivity. But they'd probably take a more worldly view. How do we connect people in Africa, and how do we connect people in Third World countries? And they'd probably look at that a little bit differently than maybe the way Facebook or Amazon would look at it, or Netflix would look at it. But they all have to look at it. And there's a lot of creative solutions out there. Anjali Athavaley - Reuters News Agency: Thank you.

And we'll take our final question from Ryan Knutson with The Wall Street Journal. Ryan Knutson - The Wall Street Journal, Inc.: Great. Thanks. I have one just clarifying point and then – first question is, with 600 megahertz, are you saying that you don't want to build anything? Or it's going to be really challenging to build anything until you get your hands on that network? I mean, how much does that handicap your ability to start building at least some elements of the network? And then, secondly, can you talk a little bit about your preference or some of the different factors when it comes to either partnering with an existing operator to build a network versus build more on your own with tower operators and things like that? Charles William Ergen - DISH Network Corp.: So, first and foremost, we are building the network and we're building the network using our E Block and AWS-4 spectrum, and we're doing that by the next 947 days, not that I'm counting. Having said that, our dream would be to go to the tower one time and build out our spectrum in the 5G standard. That would be our dream, right? Because there's tremendous cost savings in doing that. And in fact to take it a step further you might go in conjunction when somebody else is building their network. So if AT&T was building their first network and you could go to the tower at the same time they go to the tower there might be some synergy in that, but the best synergy for us would be to put all of our network together at one time, go to the tower one time. The problem we have is we have the build-out deadline from the FCC that says you have to have some of your spectrum in use by 2020. And the problem is the hardware for 5G is not ready, and our 600 megahertz spectrum is not ready, and our AWS-3 spectrum is still in litigation. So it's hard to plan for those and we certainly don't want to build 4G network, and then the day we light it up, it's obsolete. And we got to go back six months later and convert it to 5G. That doesn't make any sense. And we don't want to climb the tower two and three times because every time you climb the tower it costs you thousands and thousands of dollars. You do it nationwide, it'd be billions of dollars. So I think logically, what we've said is we'll have to do it in phases, maybe not our preference, but we'll get a lot of experience and we'll have a business in narrowband IoT and then phase II is to layer in full 5G connectivity on top of that. And we won't even start planning in that network until we've got our IoT network planned, which should be totally planned by 2018. And then we can start thinking about phase II. Ryan Knutson - The Wall Street Journal, Inc.: And then, do you have a preference in terms of partnering with an existing operator? And also how much do that cause a struggle for you if you can't build out everything you want to do it first. I mean, it seems like that limits your options strategically. Charles William Ergen - DISH Network Corp.: Well, I mean, that's what management is all about, which is you know where you want to go and you got to figure out how you got to get there. And again, I think we're going to try to do is this thing in two phases. It could be three phases, but preferably two phases. And first phase is what we've indicated to the market to the FCC, and I think people think that's logical. And then I think the second phase is we've got a lot of spectrum we're going to put to use in the 5G, and I think there's going to be people who have like interest to see that spectrum in 5G and there may be opportunities to do that in a more efficient way than we can do by ourselves. But if not, we will do it by ourselves, right? I mean, I never thought we're going to build a satellite I thought we're going to get somebody else to build satellites for us. And at the end of the day, we couldn't get anybody to build a satellite, so I think we're launching our 23rd satellite next month. So, life goes in plenty of directions but that's what management is all about. And you have to have enough confidence in your team and enough confidence in your abilities that you have really good assets that you can turn into cash flow and do it in a smart and logical way. And I think with technology, you got to be pretty open-minded. The technology go in directions you can't foresee. In my mind, have a way to how we do it, but I think it probably will vary a little bit over time. R. Stanton Dodge - DISH Network Corp.: So, operator, we will leave it there. And thank you all for participating, and we'll probably talk to you in November.

This does conclude today's conference. We thank you for your participation. You may now disconnect.