DirecTV To Wire Every House (in Homeowners Group

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DirecTv Inc. has wired nearly every house in a planned
residential community in Irving, Texas, to receive its direct-broadcast satellite service,
after a group of homeowners there sought a replacement for cable.

This marks the first such deal between the company and a
single-family-home community, although DirecTv has been targeting the
multiple-dwelling-unit market for more than a year.

The Hackberry Creek Homeowners Association voted narrowly
earlier this year to designate DirecTv as its multichannel service of choice. Since July,
all homeowners in the community, located outside of Dallas, pay an additional $195 in
annual dues to help pay for the service, whether they choose to take advantage of it or
not.

That service includes DirecTv's "Total Choice"
package — a comprehensive tier of basic services.

DirecTv and its local master-systems operator, Golden Sky
Systems Inc., also paid to install Digital Satellite System dishes, DSS receivers and
off-air antennae in each house in the development. To date, about 705 of the 900 homes
have been outfitted with the equipment.

"We decided that we wanted to offer something a little
better to our residents," said John Meek, president of the Hackberry Creek HOA.

Patrick Osweiler, a Hackberry Creek resident, spearheaded
the effort to strike a communitywide deal with DirecTv after Las Calinas, the larger
planned community that encompasses Hackberry Creek, sold its privately operated cable
service to Paragon Cable.

Osweiler took some heat from other residents, who accused
him of taking kickbacks from DirecTv.

"All I got was a T-shirt," he said.

Like Osweiler, his neighbor, Ken Koffler, bought a DSS dish
and receiver well before the HOA voted to bring DirecTv in.

"The cable service went out once or twice a
month," he said.

And once the cable system was sold to Paragon, residents
had to pay at least $30 per month if they wanted cable, whereas cable fees had previously
been buried in their annual association dues.

At first glance, DirecTv appears to be heavily subsidizing
hardware for customers who subscribe to programming at bargain-basement prices.

But Jimmy Schaeffler, chairman and CEO of DBS consultancy
The Carmel Group, said DirecTv is willing to sacrifice about $15 per month, per subscriber
in the hopes that the subscribers will step up to sports packages, pay-per-view movies and
higher-ticket programming packages.

It was probably a bet worth taking.

Osweiler said Hackberry Creek is an affluent community,
where homes are valued at between $200,000 and $600,000, and the average home has four
TVs.

This raised concerns among some residents, who were
accustomed to a whole-house solution with cable, Meek said.

The free hardware offer is limited to a single receiver,
although DirecTv offers discounts for additional receivers. However, there's a monthly $5
service charge to send programming to each additional box.

Mike Meltzer, DirecTv's vice president of multiunit sales,
sees the Hackberry Creek deal as part of a trend of wiring entire communities, both at the
time of construction and in retrofits.

"Having a small dish on a roof has become almost a
badge of honor in some communities," Meltzer said.

He added that DirecTv plans to deploy the program
nationwide through its master-systems operators.

Bill Gerski, vice president of Golden Sky, said the company
expects to sign a deal sometime this week with another planned community in the Dallas
area that encompasses 5,000 MDUs, 2,000 single-family homes and a 350-unit hotel.

And Golden Sky is talking with U.S. Satellite Broadcasting
about the possibility of including its premium-movie services in future bulk-billing
offers. MCN

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