FCC Set-Top, Spectrum Frontiers-Related Proceedings Among EchoStar Concerns

Among potential EchoStar concerns as the company reported quarterly results Tuesday are some FCC and other regulatory proceedings, along with business issues relating to its devices. "Our customers face emerging competition from other providers of digital media and potential government action preventing them from using security systems in connection with set-top boxes," the company said in an SEC filing, which noted that Dish Network is a top customer; both companies are controlled by their Chairman Charlie Ergen. "The FCC is considering adopting regulations enabling consumer electronics manufacturers, innovators and other developers to build devices or software solutions that may provide access to multichannel video programming with the use of user interfaces and without the use of any set-top box." That unlock-the-box proceeding has encountered slow going, with FCC Chairman Tom Wheeler just before commissioners' Sept. 29 monthly meeting putting off a vote on a draft order. Discussions have been continuing (see 1610180052). Demand for EchoStar's satellite TV digital set-tops from Dish and other customers "will likely continue to decline and we may not be able to sustain our current revenue levels," it said. In July, the company wrote, it decided to end offering consumer security and home automation products and services that were introduced this year. In a section of its filing on risks, the FCC set-top proceeding and spectrum frontiers order were cited, as some of the Ka-band spectrum where EchoStar operates broadband gateway earth stations has been enabled for 5G. Other countries "are also considering regulations that could limit access to the Ka band," EchoStar noted. Carriers and satellite interests aren't in full agreement on technical rules related to an ongoing spectrum frontiers proceeding (see 1611010044). The company didn't immediately comment further to us Tuesday. For Q3, the set-top maker reported that sales fell 2.4 percent to $742.3 million from the year-ago quarter as profit rose 32 percent to $37.4 million. In a quarter that was largely as expected, Hughes broadband subscribership declined by about 12,000 to 1.02 million "as the firm’s satellites have reached capacity in certain areas," Citigroup analysts wrote investors. "Citi forecasts flat subscriber growth for the year."