EchoStar: Prices Down, 4th Bird Heading Up

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EchoStar Communications Corp. said last Thursday that it
has lowered its basic Dish Network direct-broadcast satellite system price to $149, with
up to $60 in additional programming discounts available to new subscribers.

The promotion comes on the heels of a joint DirecTv
Inc./U.S. Satellite Broadcasting retail offer valued at $100.

"We will never allow ourselves to be anything but the
low-cost provider," EchoStar chairman and CEO Charlie Ergen said.

But Ergen argued that it's not just the cost of DBS
hardware that keeps cable customers from migrating to DBS in greater numbers:
"It's the fact that we don't have local channels."

EchoStar is trying to change that with its local-to-local
service, which it has already introduced in six cities. The launch of the EchoStar IV
satellite from Kazakhstan this Friday will allow the company to add West Coast cities to
its local-channel lineup as early as August.

But the local-to-local plan faces an uphill battle on a
number of fronts, Ergen admitted. Because EchoStar is offering its service only to
customers who cannot get good broadcast signals with off-air antennae, the company does
not have critical mass from which to launch an aggressive marketing campaign.

Local broadcasters in the few markets where EchoStar offers
its local service have refused to air its ads. And Ergen admitted that the need for a
second dish to receive the local signals has also been a factor.

Of course, it's not just marketing that's holding
EchoStar back from expanding its local-to-local plans more aggressively: Washington, D.C.,
has yet to determine whether it will impose must-carry restrictions on DBS, or whether it
will allow EchoStar to market its local-channel service beyond so-called white areas,
which are beyond the reach of acceptable off-air signals.

EchoStar has invested close to $250 million in its fourth
satellite, which is scheduled to launch Friday morning from the Baikonur Cosmodrome.

"The hard work is done long before you get to the
launchpad," Ergen said, adding, "Now, it's down to a little bit of
luck."

Ergen said he would follow local good-luck customs on the
day of the launch, but he declined to disclose what those customs were, saying, "That
would be bad luck."

"We've been lucky in the past," Ergen said
of EchoStar's three prior successful launches across the globe. "We'd
rather be lucky than good."

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