EchoStar Plans First Local DBS Markets

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EchoStar Communications Corp. plans to start rolling out
its first local-market direct-broadcast satellite signals this month, whether or not the
company receives an official go-ahead from Washington, D.C., or from the local
broadcasters in question.

By the end of January, EchoStar hopes to serve 10 local
markets in the Eastern half of the country with local-network-affiliate and
independent-broadcast signals from its recently launched EchoStar III satellite. Users
would need a second satellite dish to receive both current Dish Network programming and
the new signals.

The company will make the local-channel service available
only to homes in so-called white areas beyond the reach of a good off-air signal, but
still within the given local market, according to David Moskowitz, senior vice president
and general counsel for EchoStar,.

Moskowitz added that although EchoStar has had discussions
with local broadcasters about retransmission consent, 'we can go forward without the
consent.'

DBS companies currently do not need broadcasters'
consent to retransmit local signals to unserved homes.

Moskowitz said he does not believe that EchoStar will need
retransmission consent from broadcasters to send their signals to homes that can receive a
good off-air signal, as long as those homes are within the DMA.

EchoStar filed a request for a rulemaking with the U.S.
Copyright Office last month to confirm that the company is permitted to transmit local
signals to served households.

Additionally, Moskowitz said, legislation before Congress
would allow DBS companies to send local signals to served households in distant markets.

Copyright fees for local-network and superstation feeds
delivered to unserved households within the same market are zero, said Moskowitz, and the
fee is 27 cents per subscriber, per month for all other homes. He added that he expects
the prices for a package of local signals to be the same for all households, regardless of
the copyright fee.

In a monthly on-air chat with subscribers last month,
EchoStar chairman and CEO Charlie Ergen said EchoStar would charge subscribers about $5
per month for a package of their local-market broadcast signals, adding that the feeds
would be digital-quality.

Ergen said the first wave of local markets was likely to
include New York; Baltimore; Washington, D.C.; Chicago; and Atlanta, with Dallas, Boston,
Detroit, Philadelphia and Minneapolis following closely behind.

Markets in the Western half of the country will not be
served with local signals until after EchoStar launches its fourth satellite in the
spring.

The first Western markets likely to be added include Los
Angeles; San Francisco; Seattle; Phoenix; Denver; Sacramento, Calif.; and Portland, Ore.

'Unfortunately, the economics of satellite don't
allow us to do all cities in the United States,' Ergen said.

But in the next six months, he added, EchoStar expects to
reach about one-half of U.S. homes with their own local channels.

'It's a big investment for us,' Ergen told
his subscribers, 'but I know that it's what you guys want.'

In his chat, Ergen suggested that 'white-area'
subscribers who don't live within a market that EchoStar will serve would be able to
pick a package from any of the cities offered, provided that the customer had not
subscribed to cable within the past 90 days. EchoStar now offers a handful of East Coast
and West Coast network feeds through PrimeTime 24.

EchoStar is expected to detail some of its plans for new
programming, as well as pricing for its second-dish system, at the Consumer Electronics
Show this week in Las Vegas.

For the past month, EchoStar has been selling the second
dish direct to subscribers for $99.

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