News

Dish Pushes Rural Broadband With DishNET Bundles

Satellite Operator Launches 5- and 10-Mbps Tiers Under New Brand 9/26/2012 7:22 PM Eastern
Dish Network will begin marketing satellite broadband Internet service that promises “4G-level speeds” to millions of rural Americans nationwide under its new dishNET brand, and will offer price breaks if customers also order satellite TV.
The dishNET service, which the company says offers a maximum of either 5 or 10 Megabits per second depending on a customer’s location, is provided through deals with ViaSat and Hughes Network Systems.
DishNET will be available to order starting Oct. 1. Dish will offer a $10 monthly discount for customers who also subscribe to its midtier or higher TV packages.
The service isn’t being positioned as directly competitive with cable broadband, which is available in many areas at downstream speeds of 100 Mbps or more. Rather, Dish is aiming for rural and “urban fringe” residents who can’t get fast wireline broadband connections.
“We have not really talked about satellite broadband -- we’ve never marketed it,” said Vivek Khemka, Dish’s vice president of product management. “That’s largely because satellite broadband was unsatisfactory. It was broadband of last resort. Now we do think the service is competitive.”
The dishNET satellite broadband starts at $39.99 per month (plus equipment fees) for 5 Mbps download and 1 Mbps upload speeds, with usage capped at 10 Gigabytes, when bundled with Dish’s America’s Top 120 or higher programming packages and a two-year contract. Most satellite customers can upgrade to a 10 Mbps down/1 Mbps up plan capped at 20 GB per month for $49.99 per month.
The broadband service requires the installation of a two-way-capable satellite dish, separate from the operator's regular TV dish.
Up until now, Khemka said, “People have been paying $60 [per month] for a 1 Mbps connection.”
About 80% of the U.S. will have access to dishNET’s 10 Mbps option, while the remainder -- largely in Western states -- will be limited to 5 Mbps.
About 19 million Americans lack access to high-speed Internet, including 14.5 million who live in rural regions, according to the Federal Communications Commission’s August 2012 broadband progress report.
The dishNET service is provided through Hughes and ViaSat, but all services are sold, installed, billed and supported by Dish. EchoStar, a sister company of Dish, acquired broadband satellite service provider Hughes Communications for $1.3 billion in February 2011.
Together, the ViaSat Exede and Hughes EchoStar XVII satellites will be able to support 4 million to 5 million subs depending on what plan they take, according to Khemka.
Given the relatively low usage limits, Dish is not promoting dishNET as a way to watch streaming-video services such as Netflix. “As long as you’re not doing BitTorrent or large amounts of streaming video, you’ll be fine,” Khemka said. He estimated that 70% to 80% of users would stay under the service’s 10 and 20 GB caps.
The dishNET service will support short-form video streaming, as well as social media, music streaming, and voice-over-IP services.
But if Dish TV customers have better wireline options available, the company will continue to refer them to cable or telco services. “If they can get it, they’re better off sticking with the wired option, because they don’t have to worry about the data caps,” Khemka said.
Dish had about 14.06 million satellite TV customers as of June 30. The company has been reselling the legacy WildBlue satellite service and ViaSat’s Exede, but does not disclose number of subscribers for those.
As for potential conflict with broadband offerings from ViaSat or Hughes, Khemka said Dish’s strategy “is to go after the bundled customer… [ViaSat and Hughes] understand what we are doing.”
Installation is free for new and existing Dish TV customers when dishNET is bundled with TV service and $99 when ordered as a standalone service. Existing Dish satellite Internet customers can upgrade to the 5 Mbps or 10 Mbps speeds for $200.
In addition to satellite Internet service, Dish will offer DSL service in a 14-state area served by the former Liberty Bell, a competitive local exchange carrier the company acquired in January 2011.
The DSL Internet service, to also carry the dishNET brand, is available for $29.95 per month for 7 Mbps, $34.95 monthly for 12 Mbps service and $39.95 for 20 Mbps. That service is available in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. 
The dishNET service includes five email accounts, each with 2 GB of storage, accessible via a Web portal that include access to search, news, entertainment and weather.
Dish provides more info the dishNET packages at www.dish.com/dishnet.
The company is holding a launch event Thursday for dishNET -- hosted by CEO Joe Clayton -- in Jackson, Miss., at Cowboy Maloney’s Electric City retail store, which lays claim to being the first retailer in the country to sell DirecTV and Sirius satellite radio services.
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