News

Dish Runs Rural Double Play

9/28/2012 10:09 PM Eastern

Dish Network says satellite broadband is now fast and affordable enough to bundle together with its TV services — but still not on par with cable or fiber-fed Internet services.

The No. 2 satellite-TV operator will begin marketing satellite broadband Internet service that promises “4Glevel speeds” to millions of rural Americans nationwide under its new dishNET brand, offering a $10 monthly discount for customers who also subscribe to its midtier or higher TV packages.

The dishNET service, which the company says offers a maximum speed of either 5 or 10 Megabits per second, depending on a customer’s location, will be available to order starting Oct. 1.

Dish is targeting the service at the approximately 19 million Americans who lack access to high-speed Internet, including 14.5 million who live in rural regions, according to the Federal Communications Commission’s broadband progress report, released in August.

The service starts at $39.99 per month for the 5-Mbps download service, with usage capped at 10 Gigabytes, when bundled with Dish’s America’s Top 120 or higher programming packages and a two-year contract. About 80% of customers would be able to upgrade to a 10-Mbps down/1-Mbps up plan capped at 20 GB per month for $49.99 per month.

Dish isn’t positioning the service 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,” Dish vice president of product management Vivek Khemka said. “It was broadband of last resort. Now we do think the service is competitive.”

However, if Dish TV customers have better cable or telco broadband options available, the company will continue to refer them other providers. “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.

Given the relatively low usage limits, Dish is not promoting dishNET as a way to watch streaming-video services such as Netflix, Khemka added.

The dishNET broadband service requires the installation of a two-way-capable satellite dish, separate from the operator’s regular TV dish. It’s provided through deals with Hughes Network Systems and ViaSat, but all services are sold, installed, billed and supported by Dish. EchoStar, a sister company of Dish, acquired 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 which plan they take, according to Khemka.

In addition to satellite Internet service, Dish offers 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 be marketed under the dishNET brand, ranges from $29.95 per month for 7-Mbps download speeds to $39.95 for 20-Mbps downstream speeds.

TAKEAWAY

Dish Network said it has finally developed an affordable satellite-broadband alternative for rural subs.

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