Chicago Suburb Pays Locals to Buy Dishes

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It wasn't that long ago when many towns actively
discouraged would-be satellite-television subscribers from installing dishes.

In the days before small-dish direct-broadcast satellite
service from DirecTV Inc. and EchoStar Communications Corp., local zoning authorities
frowned upon the larger dishes that were needed to pull in the signals.

Fast-forward to 1999: The Chicago-area village of Itasca,
Ill., plans to pay residents $100 to sign up for DBS in the hopes of promoting competition
to cable incumbent AT&T Broadband & Internet Services, which took over the system
from Time Warner Cable earlier this summer.

The Itasca Village Board voted last week to earmark $10,000
from Itasca's general fund toward rebates for the first 100 residents -- whether
they're currently cable customers or not -- who sign up for DBS by mid-October.

"It's a complete misuse of public funds,"
AT&T Cable Services western Chicago general manager Ron Murray said, noting that a
portion of the village's general funds come from cable-franchise fees paid by
AT&T Broadband.

"Cable has certain built-in expenses that satellite
does not have," Murray added, including public-access channels and franchise fees.
"We're not looking at an apples-to-apples comparison."

DirecTV last week discussed with the Itasca board plans to
enhance the town's offer with equipment and installation discounts or to offer
similar enticements to residents who miss the first-100 cutoff. Spokeswoman Gina Scalise
said last Thursday that those details had not yet been finalized.

EchoStar last week was firming up plans to market a special
offer of its own directly to Itasca residents.

The company already offers free hardware and installation
to new subscribers nationwide who make a one-year commitment to a certain level of Dish
Network programming. But in Itasca, new subscribers would not have to shell out hardware
costs upfront and wait for their rebates from the company.

Murray said Village Board members told the cable operator
they would not try to influence consumers' decisions in choosing a multichannel-video
provider, but he wasn't convinced.

"If you happen to take the dish, you happen to get
$100," he said. "It's like being in a card game and finding out the guy is
dealing from the bottom of the deck."

AT&T Broadband plans to provide educational materials
to help consumers choose between cable and satellite, Murray added.

"A cable-television operator provides local signals,
where a satellite provider does not," he said, adding that it's tough to get
local signals off-air in Itasca because the village lies within a flight pattern of
Chicago's O'Hare Airport.

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