Retailers Report Mixed DBS Results

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Direct-broadcast satellite and off-air-antenna retailers
stand to gain from a drawn-out retransmission-consent negotiation process.

DirecTV Inc. and EchoStar Communications Corp. have each
won retransmission consent for Fox owned-and-operated stations, although neither has
launched local-to-local packages in every market where Cox has dropped Fox.

EchoStar serves Washington, D.C., and Dallas with local
stations, and DirecTV serves both of those markets, plus Cleveland and Houston.

Because the DBS companies have only begun carrying local
broadcast channels in the past month, many cable customers in those markets did not yet
know they could receive local stations over satellite.

"I don't think the awareness is nearly as high as
we'd like it to be," said Dick Beville, president of Bell Atlantic Video
Services, which sells DirecTV service in Fairfax, Va., and other areas in the Washington
market.

The disagreement between Fox and Cox has helped to raise
awareness of Bell Atlantic's cable-replacement model, Beville said, adding, "Let
the dispute rage on."

Bell Atlantic worked quickly to capitalize on Cox's
misfortune, sending out an existing direct-marketing piece last Monday (Jan. 3) via
first-class mail, with a stamp on the envelope calling attention to its carriage of the
local Fox station for customers in the Fairfax market.

"I don't always like to benefit off somebody
else's misfortune, but when it's the customers' misfortune, I want to help
them out as much as I can," Beville said.

"All of this is great for our industry," said
Buddy Davis, owner of Davis Antenna, a DBS and off-air-antenna retailer in suburban
Washington. "I hope they kick all of the networks off cable."

DBS providers and retailers initially heard complaints from
irate cable customers who were concerned about losing access to National Football League
games, which were normally shown on Fox. Both the Washington Redskins and the Dallas
Cowboys were in the midst of the playoff hunt when the news broke that Cox would
discontinue the Fox feeds.

Ironically, the first Redskins game after the Cox/Fox
blackout was carried on CBS locally, and this past Saturday's playoff game was
scheduled to air on ABC. But some other NFL playoffs are still set for Fox.

By mid-Tuesday, Davis Antenna was booked through the
weekend for satellite and antenna installations.

Cleveland Satellite Inc. received many calls from cable
customers in the Cleveland suburbs of Parma and Parma Heights who were seeking information
on DBS last week, according to secretary Kitt Kickel. "They're quite upset"
at losing their Fox feed, she said of the callers.

Not every DBS retailer heard similar complaints, however.

In Dallas, Culberson TV owner Randy Culberson said last
week that he didn't have any calls the previous weekend from disgruntled Cox
subscribers.

In Cleveland, Audio Craft salesman John Ramsay said that
although business was "exceptionally busy" the first weekend of the new year,
there was no indication that the store had cleared out its DBS inventory, nor that it had
received a lot of complaints about Cox.

A spokesman for DirecTV said the company had no immediate
plans for advertising or promotions directly related to the Cox/Fox dispute.

But DBS rival EchoStar does plan to use guerilla-marketing
tactics in the cities where its carriage of Fox stations overlaps with Cox's expired
retransmission deals.

EchoStar has chosen the Washington, D.C., market to unleash
guerilla marketing attacks against Cox. EchoStar vice president of marketing Mary Peterson
said the company would run full-page ads in local papers starting late last week with the
headline "Drop Cox, Not Fox" on top of a previously-planned ad to promote Dish
Network's free hardware and installation promotion.

"Cox did us a big favor," Peterson said.

Other guerilla marketing tactics could include going
door-to-door in Fairfax County with promotional door hangers promoting the availability of
local channels such as Fox, perhaps through the help of local dealers, Peterson said.

"You know us," Peterson said. "We're
able to move very quickly."

EchoStar chairman Charlie Ergen said broadcasters are
getting into fights with cable over retransmission consent that they may not have seen if
satellite did not have local-to-local packages of their own.

DirecTV president Eddy Hartenstein said he expects to see
additional impasses over retransmission consent between cable operators and broadcasters.

Consumers who make the move to DBS for their local signals
will be pleased with the video quality, Hartenstein added.

"The pictures are absolutely sparkling," he said.

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