EchoStar Extends Bounty to Cable Subs

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Striking an ever more competitive posture, EchoStar
Communications Corp. has decided to put cable operators on notice that if they offer
incentives to satellite customers who switch to cable, it will respond in kind.

The direct-broadcast satellite provider has also extended
current bounty programs against PrimeStar by DirecTV and large-dish C-band satellite
customers until the end of the year, director of customer-acquisition marketing Scott
Landers said.

In each case, EchoStar offers a free Dish Network system,
free installation and six months' free programming to customers who switch from the
competing services.

Barbara Sullivan, president of Denver-based B.G. Marketing
Inc., called the tactic

an effective motivator to get would-be DBS customers off the fence.

EchoStar is not gunning for all cable customers -- at least
yet. It launched its cable-bounty program over the summer against a Cox Communications
Inc. system about 75 miles southeast of Tucson in Sierra Vista, Ariz. Since late June, the
local operator had been offering $100 in programming credits, plus free installation, to
satellite-television subscribers who turned in their dishes and switched to cable.

EchoStar responded with full-page ads in the local
newspaper, as well as flyers at local retailers specifically targeting Cox subscribers.

Landers said the Cox bounty program would continue
indefinitely. "As long as Cox continues to have a bounty out on satellite customers,
we'll respond with an offer that's competitive," he added.

The Cox Sierra Vista campaign is ongoing, according to Cox
Tucson spokesman Rodger Dougherty. "It's been a successful campaign," he
added. The Sierra Vista system serves 25,000 customers and passes 45,500 homes.

With the help of its dealer base, EchoStar plans to gather
competitive intelligence against other cable systems that may be running similar anti-dish
campaigns.

The company already plans to offer its retailers special
co-op funds to run bounty ads against Adelphia Communications Corp., which, Landers said,
is also running satellite-bounty programs, especially in markets where it offers digital
cable. The bounty program co-op funds will be available to dealers in all Adelphia
markets, he added.

Adelphia director of sales and marketing John Aducci said
the cable operator recently sent a mailing to broadcast-only customers, encouraging them
to upgrade to larger programming packages. Because the operator believed many of its
broadcast-only customers had defected to DBS, the mailing included an offer to customers
that if they turn in their dishes and receivers, they would be eligible for about $300 in
Adelphia programming.

"We generally take the high road with DBS. We
don't bash them," Aducci said, adding that the operator prefers to play up its
own strengths, especially in markets where it offers digital cable.

In addition to the direct-mail campaign, Adelphia markets
to satellite customers through its door-to-door sales force, Aducci said, "because
they're the ones who see which homes have a dish."

Landers said EchoStar's ability to respond quickly to
competitive pressures "is our core strength as a company." He cited quick access
to upper management, the ability to print marketing materials in-house and a broadcasting
tool that allows the company to speak directly to its dealer base, allowing marketing
staff to act quickly.

Sullivan said the smaller retailers that sell Dish are much
more able to implement effective guerilla-marketing tactics than their national
counterparts would be, because larger retail chains need to get corporate executives to
sign off on promotions first.

If EchoStar can get enough local retailers to market its
anti-cable campaign, Sullivan said, it would have the appearance of being a national
offer.

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