Filed by EchoStar Communications Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Companies: Hughes Electronics Corporation,
General Motors Corporation,
and EchoStar Communications Corporation
Commission File No. 333-84472
Date: April 15, 2002
On the evening of April 12, 2002, a live Charlie Chat television show, a
transcript of which is set forth below, was rebroadcast for the first time.
In connection with the proposed transactions, on March 18, 2002, General Motors
Corporation (GM), HEC Holdings, Inc. (Hughes Holdings) and EchoStar
Communications Corporation (EchoStar) filed preliminary materials with the
Securities and Exchange Commission (SEC), including a Registration Statement of
Hughes Holdings on Form S-4 that contains a consent solicitation
statement/information statement/prospectus. These materials are not yet final
and will be amended. Holders of GM $1-2/3 and GM Class H common stock are urged
to read the definitive versions of these materials, as well as any other
relevant documents filed or that will be filed with the SEC, as they become
available, because these documents contain or will contain important
information. The preliminary materials filed on March 18, 2002, the definitive
versions of these materials and other relevant materials (when they become
available), and any other documents filed by GM, Hughes Electronics Corporation
(Hughes), Hughes Holdings or EchoStar with the SEC may be obtained for free at
the SECs website, www.sec.gov, and GM stockholders will receive information at
an appropriate time on how to obtain transaction-related documents for free from
GM.
GM and its directors and executive officers, Hughes and certain of its officers,
and EchoStar and certain of its executive officers may be deemed to be
participants in GMs solicitation of consents from the holders of GM $1-2/3
common stock and GM Class H common stock in connection with the proposed
transactions. Information regarding the participants and their interests in the
solicitation was filed pursuant to Rule 425 with the SEC by EchoStar on November
1, 2001 and by each of GM and Hughes on November 16, 2001. Investors may obtain
additional information regarding the interests of the participants by reading
the preliminary consent solicitation statement/information statement/prospectus
filed with the SEC on March 18, 2002 and the definitive consent solicitation
statement/information statement/prospectus when it becomes available.
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.
Materials included in this document contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause our actual results to be materially different
from historical results or from any future results expressed or implied by such
forward-looking statements. The factors that could cause actual results of GM,
EchoStar, Hughes, or a combined EchoStar and Hughes, to differ materially, many
of which are beyond the control of EchoStar, Hughes, Hughes Holdings or GM
include, but are not limited to, the following: (1) the businesses of EchoStar
and Hughes may not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected benefits and
synergies from the combination may not be realized within the expected time
frame or at all; (3) revenues following the transaction may be lower than
expected; (4) operating costs, customer loss and business disruption including,
without limitation, difficulties in maintaining relationships with employees,
customers, clients or suppliers, may be greater than expected following the
transaction; (5) generating the incremental growth in the subscriber base of the
combined company may be more costly or difficult than expected; (6) the
regulatory approvals required for the transaction may not be obtained on the
terms expected or on the anticipated schedule; (7) the effects of legislative
and regulatory changes; (8) an inability to obtain certain retransmission
consents; (9) an inability to retain necessary authorizations from the FCC; (10)
an increase in competition from cable as a result of digital cable or otherwise,
direct broadcast satellite, other satellite system operators, and other
providers of subscription television services; (11) the introduction of new
technologies and competitors into the subscription television business; (12)
changes in labor, programming, equipment and capital costs; (13) future
acquisitions, strategic partnership and divestitures; (14) general business and
economic conditions; and (15) other risks described from time to time in
periodic reports filed by EchoStar, Hughes or GM with the Securities and
Exchange Commission. You are urged to consider statements that include the words
may, will, would, could, should, believes, estimates, projects, potential,
expects, plans, anticipates, intends, continues, forecast, designed, goal, or
the negative of those words or other comparable words to be uncertain and
forward-looking. This cautionary statement applies to all forward-looking
statements included in this document.
CUSTOMER CHARLIE CHAT
APRIL 8, 2002
---------------
INTRODUCTION
Male You have a show?
Male They just dish it out.
Female Charlie, Jim and Myona here.
J. DeFranco Oh, you're on. Welcome to the Charlie Chat, what's your
question this evening?
C. Ergen Since you're on, giving things away today.
J. DeFranco Let's have a sweepstakes. We've got a caller. Andy, are you
out there?
Male [inaudible] Jimmy? [laughter]
J. DeFranco No, no, no.
Male We'll give you a free ...
C. Ergen That's a little expensive.
J. DeFranco That's okay, this is Dish Network.
We're really proud of the folks that help us in the customer
service centers, they really do make our business, they are
in contact with you.
---------------
Hello, and welcome to the Charlie Chat, our regular opportunity to sit down with
you one-on-one and tell you what's new here at Dish Network. As always we'll
take your live calls and your emails so let's begin. Here's Charlie Ergen and
Jim DeFranco.
J. DeFranco Good evening. Welcome to the Charlie Chat. It's good to have
you with us this evening, got a good show planned for you, a
lot of exciting things. Charlie, we're going to talk more.
We always get a few questions about what's happening with
the merger. EchoStar VII of course we launched it on
February 21st, a little update there. We're going to talk
about some programming changes and we're announcing the
winner of $100,000. One of our subscribers won $100,000 in
our Club Dish sweepstakes, so we're going to announce that.
C. Ergen Have we got Ed McMahon coming up to present the check or
what?
J. DeFranco No, no, no.
C. Ergen We're just announcing the winner. Okay, we'll wait and see
how that goes.
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ECHOSTAR PAGE 1
J. DeFranco It's an interesting story there. So tell us a little bit
about what's been transpiring since the last chat.
C. Ergen Well, the merger of course is one of things we're
concentrating on because we think that's the best thing to
really improve our service and our pricing to consumers. So
that's what we've been focusing a lot on at least at my
level in the company. I guess the main thing that the
merger's going to do is solve a lot of the problems that you
guys call about all the time. First and foremost you want
your local channels and we only do about 40 markets in the
United States out of 210, so we've got 170 markets that we
don't do to date. The merger allows us to launch a fifth
spot beam satellite along with the two spot beam satellites
that DirecTV has so we can do each and every market to bring
true competition to cable.
It's interesting, this week that there's 42 million
households that don't have access to local/local through
DBS. With the merger we take care of that. The FCC came out
with a study this week that showed that cable prices had
gone up over two times the rate of inflation last year and
that interestingly the rates are 8%, 9% or 10% higher where
we don't have local channels. In other words, if you're in
one of those areas where we don't have local channels, odds
are you're paying 8%, 9%, 10% more for your cable television
than people where we bring competition, so that's certainly
an important thing.
Secondly, is broadband. The second thing you're asking for
is people want high speed internet broadband that's on all
the time. It's not economical for us to do that alone. We
need capacity and we need economies of scale to do that.
These are all the homes in the red that don't have high
speed internet access, probably won't for the foreseeable
future. With the merger we're able to build a new generation
of satellites that allow us to bring that broadband service
to you at an economical rate. So those are the two big
things that we're working for.
Of course we have a lot of other things. High definition
television. We believe we can be a major force with the
merger in bringing high definition television to all
Americans. 70% of the broadcasters have filed for extensions
to do digital television. They weren't able to meet the
government mandated time line. We
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ECHOSTAR PAGE 2
can do that overnight through satellite and bring high
definition television to everybody and of course other
advanced services like interactivity and video on demand and
things like that.
So all those things are possible with the merger and again
we appreciate a lot of folks, Jim, who have called or
written their Congressional representatives, whether it be
in the State or the House of Representatives and we're very
appreciative of that. Your local officials, all those people
are going to look at this merger, they need to understand
what your opinions are and whether you think it's good for
you or not so good for you and we make that easy.
J. DeFranco Let's show them, I think we actually have a little clip that
we can show on this. If they haven't gotten involved yet and
they'd like to send a note, here's how you can do that.
---------------
VIDEO CLIP - ECHOSTAR/DIRECTV MERGER
Approval of the EchoStar/DirecTV merger would allow you to receive your local
broadcast channels via satellite and subscribe to an affordable high speed
internet access service. This would be available to you whether you live in a
town of five people or a city of five million. You'll also be able to enjoy
HDTV, expanded interactive and other new services. For your convenience we've
developed a website to offer you information about the merger and illustrate the
specific benefits in your state. The web address is www.echostarmerger.com. It
shows the benefits of the merger on a state by state basis and offers links to
EchoStar's merger related FCC filings, press releases and third party
supporters. You can also send a letter of support to Congress and the FCC
directly from the website and we encourage you to do so. Just click on the take
action button and then click on "write a letter of support." Your comments will
be automatically forwarded via email or fax. The EchoStarMerger.com website can
also be accessed through a link at www.dishnetwork.com. This is the
echoStarMerger.com website to support the merger and the great benefits it would
bring to you.
---------------
C. Ergen And again you can write even if you don't support the
merger. We don't put words in your mouth, you can write
whatever you feel. And again I think the important thing is
that the folks in Washington, that live in Washington don't
always understand the issues as they affect the everyday
American. They certainly don't get a chance to be out in
rural America as much as probably they would like to and
certainly they have different districts and different
representatives that represent different states and so
forth, but they don't get a
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ECHOSTAR PAGE 3
chance on a day to day basis to be out there and live with
the problems that you do. And so I think it's important that
they understand how this merger can help rural America. I've
seen a lot of Senators and Congress people who have
expressed concerns about the merger as it relates to rural
America and I think nothing could be further from the truth
in terms of the benefits of this. We're the one
telecommunications company that will offer rural Americans
exactly the same services at the same price. It certainly
doesn't happen in telephone, certainly doesn't happen in
cellular phone, certainly doesn't happen in broadcast
television today. So I think it's important that you do make
your voices known. So that's what's happening on that.
We launched EchoStar VII. I think it was right before last
Chat and that satellite is up and going through its final
paces, the final testing and we expect that satellite's
going to be ... here's the launch and that satellite is
going to be operational right around the first of May. It
again allows us to do a little bit more than local, add a
few more cities there and allows us to improve the quality
of our signal. We've had some folks say that they'd like to
see some improvements in the quality of the signal and we're
able to do that with this satellite. It provides backup in
outer space for us so that if we ever had a problem with the
satellite that we'd have in-orbit backup so you don't have
to worry about losing your service from Dish Network at any
time because of technical issues in outer space which we
don't control, so a lot of benefits there. And of course we
have another satellite launching hopefully in June of this
year which will again increase our local service and bring
us some more channels.
J. DeFranco Charlie, can we be a little more specific on what Echo VII
does, because you said it goes into service next month, what
can our customers out there expect out of that? Will it only
affect them in certain areas as far as additional services?
C. Ergen Everybody will see improvements in their video quality.
Everybody will have the advantage of in-orbit backup.
Everybody ... the power's a little bit greater so we fight
through some of that rain fade, so it has to rain a little
bit harder for you to lose your signal and we will have some
capacity for some additional channels. Again we continue to
look at channels. There isn't a lot that we don't carry out
there anymore, we carry almost everything that's out there,
but we look at a few additional channels. And then we will
have a few additional local cities that we
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ECHOSTAR PAGE 4
can broadcast. We're looking very seriously at Alaska and
Hawaii, to bring up Honolulu and Anchorage for example. We
also have the ability to bring some more local channels to
the core locations. So those are all the things that we're
looking at with the satellite and we'll make the final
decisions as we see exactly how it operates and we have some
transition issues so that you don't lose any services while
we're moving the satellites around. We really need to have
EchoStar VIII to fully use EchoStar VII. It will be later
this summer when our next satellite launches.
J. DeFranco So that's when we'll really see our ability to do some more.
C. Ergen Well I think people will see immediate impact from Echo VII,
but you'll see even more impact later in the summer.
J. DeFranco Okay. We have a few questions that came in before the chat.
This is from Lori Whitmore and Lori asks, and actually this
relates to the merger, Lori asks if the proposed merger with
Dish Network and DirecTV takes place (she's actually a
little ahead) but the coming season, will NFL Sunday Ticket
be available on Dish this fall?
C. Ergen That's a good question and I guess I'd answer this way.
First of all, DirecTV has exclusive rights to the NFL Season
Ticket for this year only, so they have one more year left
on that contract. It was about a seven year contract, so
they have one year left and if the merger takes place before
the season starts, then we would be able to, in our opinion,
offer the Season Ticket. If the merger doesn't take place
until after the season's over, then hopefully we'll be able
to negotiate that Season Ticket for DirecTV and of course
all of our Dish Network customers for next year. There's no
guarantees that anybody will have Season Ticket next year
because nobody has been awarded that contract yet. It's
possible that nobody will be awarded the contract. It's
possible that it will be available to cable and satellite
providers. It's also possible it will only be available to
cable or just satellite, so we just don't know yet. But the
short answer is when the merger's approved this year, we
think we can offer NFL Season Ticket in some form or fashion
to you, our customers, once it's approved if it's before the
season's over.
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ECHOSTAR PAGE 5
J. DeFranco Okay. Maybe you can ask generally, but this is specific,
this is from Raul and I know we've talked about it and
that's kind of what you've been addressing is that with the
merger it does give us some additional capacity, but he
specifically is asking about Puerto Rico. He lives down
there and wants to know if the merger will help him get more
channels or some new offers.
C. Ergen There is increased power levels down to Puerto Rico, but we
don't have a direct beam on Puerto Rico. EchoStar VIII has
some additional coverage of Puerto Rico, but neither
satellite's designed for all of our programming to come to
Puerto Rico. We do have a spot beam on Puerto Rico for some
channels, but again until the satellites are up and tested
we don't want to talk about that particular service because
we have to test it to be sure we can do it because neither
satellite was designed specifically for Puerto Rico so you
don't really know what the service level is there, but we
obviously have some service there today, Jim. In Puerto Rico
you need a larger dish. We expect that EchoStar VII and VIII
will reduce the size of that dish and add some channels, but
again it's not core for us.
J. DeFranco Okay. This next one, this is a little off of additional
services, but this is pretty interesting. This is from Bill
Baez and Bill says, Dish Network currently offers customers
PVR without a monthly fee and DirecTV has a similar service,
but charges $9.95 a month. If the merger is approved will
the services come in at a cost or will they be free? That's
very interesting.
C. Ergen Well, for those of you who have our PVR we hope to continue
that at no cost in terms of the monthly service fee. DirecTV
service is through a company called TiVo and a company
called Ultimate TV which is Microsoft and those contracts
would continue and there would be a service fee for those
since those are contracts with third parties and we just
continue those as they are. So you'd have a choice as a
customer as to which one of those services you'd want to
buy. Obviously, we're very proud of the fact that Dish
Network that offers Personal Video Recording features. We're
the only people in the industry today that offer that free
of charge and we save you $10 a month.
J. DeFranco Charlie, we've got a few more questions, but why don't we go
through some more of the content here? We've got some
programming announcements.
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ECHOSTAR PAGE 6
C. Ergen We've got some pretty big programming.
J. DeFranco Absolutely, it's nice to know that our programming people
have made some progress here, so let's talk a little bit
about that.
C. Ergen I think the biggest news on programming is that we were able
to work a business transaction with the Disney Company for
ABC Family, that it's going to continue in America's top 50
for a long, long period of time. We extended that contract
with ABC Family and we're excited about that. ABC has talked
a lot about how they're going to improve that service and
they've already made some changes there and they've shown us
a lot of the things they're going to do in the future and
we're very excited about that. That's going to be a great
channel and continue to improve.
Secondly, ESPN Classic is back in America's top 100, it's
going to start April 17th. And as you know we had to take
that channel down the first of January and it's been off for
three months and we're excited about getting that back. Had
a lot of folks call us about that channel, missed having
that channel and again we were able to bring it back. And I
think the best news, Jim, is we're putting that channel back
on, there's no additional charge, we're not having to raise
rates to bring back the channel.
So we've been able to solidify our relationship with Disney,
we had some good heart to heart talks and we found that we
had a lot in common. We had found that it was not in our
best interest as a company to be feuding, either one of us,
and we're excited about the fact that that relationship is
back on track. Any time that we've had a chance to sit down
with other company executives where we had disputes, which
happen from time to time, we've been able to work them out.
And in this particular case Disney was kind enough to sit
down with us finally, we talked and we worked through it and
it took a few months to do that and we're very pleased to
have them back. I think we carry about 12 channels from the
Disney network. So between ESPN, ESPN-2, ESPN Classics,
Family Channel, Disney and Cartoon Disney, ABC - all those
channels are from the same programmer.
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ECHOSTAR PAGE 7
J. DeFranco The couple examples you just gave, Charlie, are cases where
there was some type of activity going on, contractual issues
and so on, but obviously the service did stay up, but we had
to work through ...
C. Ergen Other than ESPN Classic. That did come down for the three
months.
J. DeFranco No, but what I'm saying is that ... Classic was still
available in the U.S. market, right, but we had some rate
disagreements and so on and so forth, but from time to time
a programmer decides to take their service off the air
entirely.
C. Ergen That's right, we have no control over that.
J. DeFranco And we actually have one of those announcements as well this
evening and that is CNN SI. So CNN Sports Illustrated will
actually be discontinuing the service. Turner will be
discontinuing that May 15th, so that's a case where for
whatever reason they felt that it didn't make sense to have
that channel in their bouquet of services.
C. Ergen Right and I think Turner will try to relaunch another
channel in its place at some point in time when they maybe
have a little better concept that consumers are more excited
about, but that one's coming off.
J. DeFranco Okay, let's switch to international. We had a little
activity going on with the Polish language services I
believe. Can you tell us a little about that?
C. Ergen Well, for the Polish viewers we have a channel called TV
Palonia. Their contract is up in April this year. So far
they have not renewed that contract. We don't control
whether they renew that contract or not, so should they
decide not to renew that contract, then TV Palonia would be
coming down some time this month. We certainly hope that
they renew that channel, but they're certainly not obligated
to do so, so we'll have to wait and see. We certainly offer
the same terms and conditions that we have in the past. As
sometimes happens in business, people want to change deals
and they may not make sense for either one or both parties
at some point in time, but we have offered the same kind of
transactions we've had in the past and we'll have to wait
and see. We of course added PolSat and we'll certainly look
at other Polish channels if for some reason
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ECHOSTAR PAGE 8
TV Palonia decides not to renew that service.
J. DeFranco Okay and I think there has actually been some press
regarding that in some Polish language periodicals and so on
and so forth.
C. Ergen Again we'd like to have them stay on the service, we don't
control ... they have other contractual arrangements maybe
with Poland that they have that we're not privy to. Of
course it would mean that people have to change out their
equipment if they want to continue to receive the channel so
it's a real disservice to folks, but we don't control that.
And I think we work really hard here to make sure to keep
our prices down and we have a fair deal for you.
J. DeFranco Charlie, I know there's some folks in the Northeast, in fact
we had three emails come in already. It is baseball season,
got some folks interested in watching the Yankees. It
strictly affects the people up in the New York/New Jersey
area, a little bit into Pennsylvania, I think maybe you can
talk a little bit about that.
C. Ergen I'm very disappointed that we haven't been able to reach an
agreement with the YES Network which carries about 130
Yankee games this year. The dark green area there is where
they have the rights. We worked really hard and the YES
Network folks worked really hard so we had really good
conversations, but we just couldn't work out an agreement
that made any sense. And we asked only for one thing which
was that our customers pay the same rate as other cable
companies and pay TV providers. We just never were given an
offer where our effective rate was the same. In fact it was
higher, so much higher that it didn't make a lot of sense
for us.
The second thing that we did, we said if we can't do that
then we're willing to give a channel to the YES Network
where they can put the channel up and charge customers on an
ala carte basis so those folks who want it can get it. We
offered to let YES keep 100% of the revenue. We let YES set
the price that they would charge, they keep all the money.
We would just do it as public service to our customers. That
particular idea, while creative, didn't make sense for
various reasons for the YES Network so they had good valid
reasons why they didn't think that made sense from their
business perspective.
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ECHOSTAR PAGE 9
So it left us with a choice of two things really. One was we
would have had to raise our price to all the folks in
America by about $1.00 to secure the YES Network and yet 95%
of the people wouldn't have been able to watch the YES
Network. It would have been blacked out in their area. So we
didn't think it was fair to increase everybody's price out
there by $1.00 just so people in New York could watch the
Yankees. That wasn't fair. The second choice that we had was
to go ahead and capitulate to the pricing that the YES
Network offered us and we would have had to raise all of our
basic prices by about $4.00 for the people who lived in New
York, so that means that if you're paying $22, you'd be
paying $26. And we're very proud of the fact that we have
the lowest prices on average in this industry and to
suddenly have to raise our basic package by almost 10% just
for Yankees games when we know that the vast, vast majority
of our customers don't watch the Yankees and we will have
access to some other channels, it ultimately wasn't
something that we could do. We weren't able to reach an
agreement. We apologize for that, nobody worked harder. I
think YES network worked really hard to get an agreement. I
think all our folks did, certainly the people at EchoStar
and Dish Network did as well.
We want to make sure that there are areas where you can get
the YES Network and while we'd love to have your business,
if you really want the Yankees we'll put up here maybe on a
slate where there are two big companies that have the YES
Network. One is Time-Warner Cable, which is a lot of the
folks in the New York area, and maybe put that slate up.
This is their number. We'll try to roll this at the end of
the show and there are some other small cable companies that
have the network. AOL Time-Warner or DirecTV has the
network. And again you'll ultimately be paying higher
prices, but if you want the Yankees and you think it's worth
$30, $40, $50 a year to you, then they're going to have the
service and we're not going to have it, it doesn't look like
this year. Our door is always open to continue to negotiate,
but it just doesn't look realistic given the stance that YES
Network has and given our ability of what's fair for our
customers.
J. DeFranco Charlie, I was looking at a couple of other emails.
C. Ergen We do have a lot of Yankees' games.
J. DeFranco I was going to say, did you mention the games that we do
have even without the
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ECHOSTAR PAGE 10
YES Network?
C. Ergen We'll have all the playoff games of course and World Series
games. I guess we already know they're going to win the
World Series.
J. DeFranco Let's look at the slate real quick, we'll show the slates
real quick. Several games, so this is ESPN, CBS, FOX games,
and these are the ones that we will have without the YES
Network.
C. Ergen And there's no additional charge for these games and sports
rights fees are a real tough thing for the sports teams and
for pay television networks because the rates keep going up
as salaries keep going up and at some point somebody has to
make some sense of this. And we just couldn't look you in
the eye for the vast majority of our customers in New York
and say we're raising your price $4 and you're paying more
than some other pay TV providers for the channel so it
didn't make sense to us to ultimately do that.
J. DeFranco Speaking of regional sports, we do have some good news. We
have two services, Oregon zip codes 974 though 977 have
added Fox Northwest, Charlie, so this covers Oregon State
and University of Oregon teams so those folks up in those
zip codes will get Fox Northwest. In addition to that ...
C. Ergen No extra charge?
J. DeFranco That's right. In addition to that. Indiana and those zip
codes have added Fox Midwest so that gives them the Pacers
and again without any additional cost to our existing
customers. Let's see what else?
C. Ergen I don't know, you're the one reading the script.
J. DeFranco We've got some exciting news. Occasionally, we don't do this
all the time, but we have an AT150 Sweepstakes. So this is
for customers who if you already have AT150, you're already
entered into the sweepstakes.
C. Ergen Automatically.
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ECHOSTAR PAGE 11
J. DeFranco Automatically and if you don't have AT150, you have one of
our other services and you'd like to upgrade, then in fact I
think we have a little video. Let's just take a look.
---------------
VIDEO
What's better, a free trip to Vegas or over 150 channels of entertainment? How
about both? Upgrade to America's Top 150 today and be entered to win three days
at the luxurious Venetian Hotel in Vegas, plus shows, a VIP tour of Madame
Trousseau's Wax Museum, $500 and there's more. One thousand lucky winners get
six months of Biography Magazine free. Order America's Top 150, call today,
1-800-333-DISH.
---------------
J. DeFranco Okay, that's a good deal. So that's a little trip to Vegas.
C. Ergen When are we going to find out who won the $100,000?
J. DeFranco That's coming up.
C. Ergen All right.
J. DeFranco It's coming up, but we don't want to get ahead of ourselves.
So courtesy of A&E and Biography we've got a give away.
Let's take a look at that, this is kind of nice.
C. Ergen Charlie Chat Challenge?
J. DeFranco They don't like us handling the goods anymore. Apparently we
saw something we liked then we had a little competition over
... check this out, look at this. This has a video library,
over 100 tapes in all, I saw the Rat Pack there.
C. Ergen There's not a movie called Rat Pack is there? I know they've
been in a lot of movies.
J. DeFranco Sure, you bet, documentary.
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ECHOSTAR PAGE 12
C. Ergen Oh, it's a documentary.
J. DeFranco So over 100 videos. What do we want? So the first caller who
can tell us the name of the legendary ... I didn't realize
that the question was about the Rat Pack. The legendary bad,
notorious bad boys dubbed the Rat Pack, one of the true
stories included in the A&E video library collection. So the
first caller who can call us and give us who the actual
members of the Rat Pack were will win.
C. Ergen Are you going to give me a hint, how many ... we going to
give ... there's like four or five.
J. DeFranco Five.
C. Ergen Five, okay so get all five of the Rat Pack.
J. DeFranco I think somebody will get that pretty quick.
C. Ergen As opposed to the Brat Pack.
J. DeFranco Who are the Brat Pack?
C. Ergen Well that's like Emilio Estavez, Charlie Sheen, those were
those guys, young guys, they were the Brat Pack.
J. DeFranco I see, younger.
C. Ergen The younger guys, they were the Brat Pack. The old guys, you
know the old guys were the Rat Pack.
J. DeFranco Okay so let's talk a little bit ... we're doing good here,
let's take a few more questions, Charlie, these just came
in. So this one is from Curtis Swanson and Curtis says how
will the merger with DirecTV offer affordable broadband
service to rural areas?
C. Ergen Well, again you know we've had a StarBand service, which is
a little bit larger dish, it's expensive and DirecTV also
has broadband, it's $70 a month and it
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ECHOSTAR PAGE 13
costs you about $600 or $700 for the hardware and
installation, so maybe a little bit more than that to get
this service and we just find that that's too expensive.
First of all, it's not economical. We actually lose money on
that service, believe it or not and we find it too
expensive. So with the new generation of satellites that at
this point Hughes has some under construction, we'd like to
build some more, we believe we can get that cost down to
something certainly well below $50 a month for a comparable
service to what you can get from either the phone company or
the cable companies in the cities, maybe even cheaper than
that for an always on service. So that's really what we're
trying to do. We know the new satellite technology will spot
beam satellites. We know we can do that with economies of
scale. We know we need four, five or six uplink centers. We
know we need millions of subscribers. We know we have to get
several million people to subscribe to the service and
between the two companies we can accomplish that.
The problem is that each individual company can't afford to
do that and can't make the investment to do it, in my
opinion. So what happens is without the merger, rural
America, I don't know how you're going to get broadband
because you're not going to be able to do it via satellite
in an economic manner. So maybe somebody will come up with
some other new technology to do it, but I don't personally
know how you would do it. So that's why we're so excited
about the merger because we can risk the capital. You guys
already know this if you've watched our company for a long
period of time, but every time you send that monthly check
in we're out there investing that in some new technology, or
some new satellite, or some new service. We have a pretty
good track record of being successful and doing some pretty
good technical challenges, but it's not easy and there's no
guarantees. The financial markets are much more conservative
now in terms of lending money to be able to do that sort of
thing and that's why the merger allows us to be able to do
it.
J. DeFranco This next question is from Ben, I hope I don't butcher his
name, Wolford, I think it is. He says, I have had the East
and West Coast Distant Networks for a number of years, long
before you were able to broadcast local networks. I received
a letter today from Dish Network stating that I was going to
have to have my Distant Networks cut off and I should
subscribe to my local networks. However, I received a letter
a few years ago saying with FCC and SHVA laws that I
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ECHOSTAR PAGE 14
was grandfathered since I had my service back in 1999 which
I was. I don't understand this predicament and can you tell
me what's happening there?
C. Ergen Well, again, the databases change from time to time and it's
a very complex thing. And, yes, you're right, you probably
were grandfathered back with the Seller Home Viewers Act,
but as part of our Disney settlement we also settled with
Disney some litigation that some broadcasters had brought
against us on distant signal issues and we did that. We made
some accommodations in terms of people we might turn off
that we otherwise wouldn't have to under the law as it
stands today. So it's possible that you're certainly caught
up in that, but again it probably means that you live in a
city where we're doing local to local and there's not a need
for you to have the distant network signals because we do
your local signals and that's a business decision that we've
made. Even though you might qualify under the law and so
forth, the database may have changed today from what it was
in October of 1999 and so we just can't verify that you
qualify.
I don't know the exact details of your particular situation,
but I'll tell you what we'll do. If we've got that email
we'll contact you and just double check and make sure that
we're doing everything right. There are a lot of databases
that are out there and it's a very, very confusing situation
and all we're trying to do is make sure that we protect the
local broadcaster, honor the SHVA law and also honor the
kind of contracts that we have with programmers.
J. DeFranco In the case of locals, Charlie, where folks aren't allowed
to get locals because they're within another DMA, if they
can't get it good off their signal even though the database
says they are supposed to be able to, they can apply for a
waiver. Is there anything that applies as it relates to this
or can they apply for a waiver?
C. Ergen Yes, they can apply, you can apply for a waiver in this
situation and if your local broadcast grants a waiver then
we can turn you back on. Save that email out and we'll take
a look at it specifically, but those are the kind of reasons
why you might be turned off.
J. DeFranco Let's take a couple calls. Aaron, are you there?
Aaron Yes.
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ECHOSTAR PAGE 15
J. DeFranco Welcome to the Charlie Chat. What can we answer for you this
evening?
Aaron Yeah, I have a question. When they installed my cable at the
end of last year they used some of the old cable, well they
used all the old cable that was still in the house from when
I had regular ComCast cable. And I noticed some
pixelization, I still notice it to this day and the Dish
Network ... and I called the 1-800 number, it says that it's
supposed to be all new cable, but the installers that come
out said it doesn't make a difference, it will have no
bearing on the reception or clarity and I'm kind of stuck in
between here. What should I do? When I'm watching football
or certain sports it seems like there's just like a little
bit of a blur, a digital blur sometimes and they've changed
out the units, it's not that, the only thing left is really
the cable. That's what I'm asking you, does it make a
difference old and new, can it be compatible?
C. Ergen I would say that 99% of the time the cable will not make a
difference, it would have to be in terms of pixelization or
blurriness. Typically if you had bad cable or the cable
wasn't up to spec, you just would lose the signal
altogether. It typically wouldn't be the pixelization. I
think what I'd like you to do is as we turn our new
satellite on we'll use some more bandwidth, squeeze some of
the bandwidth down to be able to comply with the must carry
law for local to local and in about 30 days or less than 30
days, about three weeks we're able to start opening up some
of that bandwidth with EchoStar VII, so I think you're going
to see that some of that goes away. I guess the question,
did you have this nine months ago and it just showed up or
have you always had this problem?
Aaron I've always had it and I've also heard that the space was
tied up there in the satellite and when it opens up or a new
satellite launches then it might get clearer, but some
technical people in your department might have thought that
I needed all new cable. I've heard that before though also
with the satellite issue, but yes I've had it since day one.
C. Ergen And how many receivers do you have in your house?
Aaron I have three. I have a PVR and then two normal receivers
upstairs.
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ECHOSTAR PAGE 16
C. Ergen Is the pixelization on all receivers or just certain ones?
Aaron It's all of them, yeah it's all of them and it's just mostly
when I'm watching the sports, especially watching football
last year.
C. Ergen I'm going to guess, and again we have a technical chat on
this show four weeks from now on Monday so that's going to
be a great time to answer it and Echo VII will be lit up by
then and I think you'll see some improvement, so you might
want to call back. But my bet would be that you're going to
see that problem go away as soon as we turn on EchoStar VII.
J. DeFranco May 13th is the Tech Forum.
C. Ergen Okay, so May 13th. I'll tell you what, go until May 13th and
then call us back if this problem still persists.
J. DeFranco The next question is from John from Pennsylvania. This is
interesting, Charlie. I really haven't had this question
before. He says is there any chance of adding Canadian
channels such as CBC or TSN to the international line up?
And also any chance of adding more radio, like ESPN radio?
C. Ergen As far as the Canadian channels are concerned, we have an
agreement with Canada ... we don't have an agreement with
Canada for something called reciprocity which means we can
only sell a certain number of channels into Canada, they can
only sell a certain number of channels in the United States.
And it's primarily Canadian law that doesn't allow us to
sell a bunch of American channels into Canada, so therefore
the Untied States government doesn't allow them to sell
channels in the United States and that's where the CBC and
some other Canadian channels get caught up. There are
negotiations going on between the trade representatives of
the two countries and we're hopeful that over time some of
the restrictions will open up and some of the Canadian
channels will be offered here and some more American
channels will be offered in Canada. But at this point in
time those trade negotiations take years and I would not
look for anything to happen for addition Canadian channels
in the United States for at least a year.
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ECHOSTAR PAGE 17
J. DeFranco I've got two questions, Charlie, that relate to PVR
actually. The first one says thank you for getting out the
search and caller ID features in the new 501. You've
mentioned that before and also you've mentioned a slow
motion feature. When can we expect that? I really wasn't
aware of that. And then Bob asked about the 508 and when it
might be available and if we have an idea what the pricing
would be, Bob Carter.
C. Ergen As far as slow motion, I don't think that's going to be ...
we don't have any engineers here tonight, that's a good one
for the technical chat on May 13th. I don't think that one's
coming on the 501 in terms of slow motion. It's a very
difficult piece of software to do and we've got other things
that we want to do certainly long before we do that to make
the product better. But I'm glad that people appreciate the
fact that for no charge we magically download that over the
satellite and suddenly a feature such as searching for a
John Wayne movie or something suddenly is available now
without having to pay any more money or trade your unit out.
And again we've made some improvements to the guide. I know
we have a seven day guide or eight day guide now that we
didn't have before and we have some other improved features
there. What was the other part of the question?
J. DeFranco 508, another gentleman asked about 508, when we thought we'd
have it and the pricing.
C. Ergen 508 is, for those folks out there who don't know about it,
the unit that's going to be coming out in the next month or
two that has an additional 40 hours of recording, so it has
twice as much recording capability as the 501. That's
probably a lot more than people need, but it's about $100
more ... it's a retail price of about $100 more than then
501 and again that probably won't be out before the next
technical chat on May 13th, so it's probably a good question
to ask them and maybe we'll have them show that unit then.
J.DeFranco We've got another caller. Gary, are you there?
Gary Yes, I am there.
J. DeFranco Welcome to the Charlie Chat. What can we answer for you this
evening?
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ECHOSTAR PAGE 18
Gary Okay. Congratulations for adding KCOB Channel 13 in the new
LA home of the Los Angeles Dodgers, that's the [inaudible]
though, but the bad news is we're not getting Fox Sports Net
2.
C. Ergen Well, that's because we don't have a contract for Fox Sports
Net 2, right? West 2, we don't have Fox Sports West 2 and
again that's something that we don't carry yet. We've
negotiated for probably two years on that service and again
it's another regional sport channel where the cost is just
so high that we haven't been able to put it on. But we
continue to negotiate that and I know we're still having
very good conversations with them, but it's not on yet.
J. DeFranco And, Charlie, I think really I know you talked a little bit
about the YES Network, but really what we're doing is we're
trying to make sure that the best we can is to provide a
good value to our customers and then like as an example in
that case ...
C. Ergen We can make everybody happy as far as the programming is
concerned and put just anything and pay whatever people want
us to pay for it. The problem is none of you would like us
very much because your bill would be $99 a month and you'd
only be watching certain channels on there so there's a
balance there that you have to ... a line you have to walk.
And what's happening with sports is people have started
taking the teams and just started putting them separately
and if we have to raise the price, while people in New York
may not care if we raise the price $1 to get the Yankees,
people in Denver aren't going to like that and the people in
New York aren't going to like it very much when we have to
raise the price another $1 to get the Chicago team, and
another $1 to get the Los Angeles team, and another dollar
to get some other teams. So ultimately the price of
television just becomes too much and we're not the biggest
company in the world so we don't have a lot of control over
that process. So what we do is we look at it and listen to
what our customers have to say and try to strike a balance
in terms of keeping our rates the lowest in the industry and
yet still have the critical mass and programming and I think
we've been able to do that with very, very minor exceptions.
We are disappointed we don't have YES Network and we
couldn't structure a deal and I think we are disappointed
that we haven't been able to structure something with Fox
Sports 2 West and certainly our door is open, our phone
lines are open if we ever can negotiate something there.
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ECHOSTAR PAGE 19
J. DeFranco Charlie, we have a winner. Bill Theraby from West Virginia.
He knew the Rat Pack group and that is of course Old Blue
Eyes, Frank Sinatra, Dean Martin, Sammy Davis, Jr., Peter
Lawford and Joey Bishop.
C. Ergen So Joey Bishop would have been the one I would have had a
hard time ... I forgot about Joey. There you go.
J. DeFranco Congratulations and speaking of winners let's talk a little
bit about Club Dish.
C. Ergen I want to know about the $100,000.
J. DeFranco That's right, we've got ...
C. Ergen You're going to make me wait til 7:59?
J. DeFranco No, no, we're going to do that, it's coming up. So we have a
great Club Dish referral program of course, but let's not
delay, let's get Greg and Sharon Chamberlain from Claire,
Michigan. Greg, are you there?
C. Ergen No, he's not there.
J. DeFranco Okay. Greg's actually on the road, so he's calling in from a
mobile phone. Hopefully we can get him. A funny story here,
he didn't believe it. Greg, are you there?
Greg Yes, I am.
J. DeFranco Welcome to the Charlie Chat.
Greg How you doing?
J. DeFranco What do you think? You feel a little like ... you feel a
little better about that $100,000 now? You didn't believe us
at first, did you?
C. Ergen Greg won the $100,000?
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ECHOSTAR PAGE 20
Greg I've been walking around for two days not sure ... not sure
or not, but yeah, I'd like to jump up and down and scream
out the window, but I promised my wife, Sharon, that I
wouldn't embarrass her on national TV.
C. Ergen How did he win this $100,000?
J. DeFranco Well, we had a sweepstakes and tell us about it. Who did you
refer, Greg, a friend, a relative or what?
Greg It's a friend of ours, the Bennetts, they had a 25th
anniversary and we thought it would be a pretty good gift
for them to have the Dish Network because we enjoy it so
well. So we bought it for them for their 25th anniversary
and I really had no idea we was entering a contest and this
has really been a great surprise.
J. DeFranco There you go. All right, so he actually ... so Greg and
Sharon were existing customers, as a part of Club Dish they
got some certificates in the mail and they actually gave it
to a friend.
C. Ergen You could refer a customer and have the customer pay, but in
your case you can certainly give it as a gift, that also
works.
J. DeFranco All right, that's an exciting thing.
C. Ergen And as a result anybody who gave a referral ...
J. DeFranco Was in the sweepstakes, both sides were, the person who
referred and the referee, the referrer and the referee were
both put in the sweepstakes and Greg and Sharon I have to
tell you again ... tell us what happened, Greg, our people
tried to call you and you hung up on them. Right? That's
what they told me, they said you hung up on them.
Greg Yeah, my wife, she was talking to ... I don't remember who,
somebody else, and you're always getting calls and people
trying to sell you things. She just wasn't sure whether to
take the call or not. She said she'd pass the message on and
didn't ... Saturday morning, I had been gone for three
weeks, running across the
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ECHOSTAR PAGE 21
country, and Saturday morning at 9:30 the UPS guy's standing
on my front door with a package, an envelope. I said, "Oh,
my gosh, what is this?" And I sat it down because I wasn't
sure whether or not to open it up and I opened it up and it
had Dish Network in it, we didn't know what to do. We were
just kind of stunned.
J. DeFranco Well, do you believe it now?
Greg Oh, yes, I do.
J. DeFranco Are you going to take your anniversary friends out for
dinner because of this? You know there you were, I mean this
a great story.
Greg Oh, yes, it has really been great for us. I'll tell you the
last few days we've been on pins and needles and now we can
jump up and down and holler.
J. DeFranco All right, well congratulations.
C. Ergen How does this work? Does he get like $1,000 for a 100 years?
J. DeFranco No, actually he gets all the money.
C. Ergen He gets all the money at one time? Because those lottery
deals always well, you win, you win like $10 million, but
they give you like $1 for the next 10 million years.
J. DeFranco I'm pretty sure. I mean the next time we do it we'll
probably do it that way, but I'm pretty sure he gets all the
money. He's going to have to put a little away for taxes I'm
sure. Greg, again, congratulations. Give our best to Sharon
and thank you very much for supporting us and spreading the
good word about the Dish Network.
Greg Well, thank you and you do have a good network. We were with
a different satellite system and we came over to yours
because of your programming and how good your system is. We
haven't had any problems with it and that's why we bought
that as a gift for our friends and we're in the process of
trying to set
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ECHOSTAR PAGE 22
up one for our daughter and hopefully we can do that with
them.
C. Ergen Good and that will save you $60 on your bill the first year.
So it will go from a $60 savings, to $100,000 savings on the
first customers, to $60 on the second, but money's money. In
fact I think it brings up the benefits of Club Dish in terms
of referring and a lot of folks call and say gee, how can we
upgrade our receiver and get a new service or we want to
upgrade our programming and there's a way to do it which is
referring customers.
J. DeFranco We're going to talk about that, but let's let Greg go.
Again, thanks a lot, Greg, I appreciate your support and
give our best to Sharon. Greg is actually an over-the-road
truck driver, that's why he was gone for three weeks and
that's why he was calling on his cell phone. So I've got a
feeling he might just spend a little more time at home now.
C. Ergen He probably drives for a company. For $100,000 he can buy
the Peterbilt deal, that's about what they cost.
J. DeFranco Actually, Charlie, you were alluding to that. If he sets one
up for his daughter or any of our customers out there refer
a customer or if you're kind like Greg and you want to go
ahead and give it to one of your family members, here are
some of the benefits you get out of Club Dish. Let's take a
look.
---------------
VIDEO
Male But more than just any club, it's Club Dish. What's in it
for you? Each time a friend is referred to Dish Network
you'll save $60 off programming for you. Have lots of
friends? You don't have a bill. Okay, okay, here's how you
get into Club Dish. Call this network, ask for a Club Dish
enrollment packet. Your friends start signing up for Dish
Network, you start saving, but that's just the start. Get
more free stuff, even a priority customer service phone
number. Call, give, get. Any questions, call and get into
Club Dish [inaudible].
---------------
J. DeFranco Okay, so let's take some calls if anybody ...
C. Ergen This is what comes in the mail I guess.
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ECHOSTAR PAGE 23
J. DeFranco That's a new one.
C. Ergen Open it up, so there it is and open it up. It's a card, you
get a card, you've got to have a membership card, that's ...
J. DeFranco On top of that, Charlie, you get a lot of other benefits
too.
C. Ergen I know that.
J. DeFranco You get, like you said, $5 a month credit for 12 months.
C. Ergen There's a certificate that makes it easy to do your
referral.
J. DeFranco So you can give this to your friends, it actually shows the
programming.
C. Ergen And you get ... you actually get two of these and I think of
course the main thing that people like is they get $5 a
month for a year for each referral so that would be $60 a
year.
J. DeFranco Annual subscription and Dish Flicks. Right?
C. Ergen Which this is Dish Flicks, this costs about ... I think this
is about $3 a month.
J. DeFranco That's got all the movies, it's a $23 value for the year.
Then you get one free Dish Mover, Charlie, so if you happen
to move over the course of the year we have a moving
program, but you get this one for free. A priority customer
service number, 800 number. And of course you mentioned the
membership card and in addition to that, a one-time award of
five coupons for free Pay-Per-View.
C. Ergen Pay-Per-View, when you watch the movie channel during the
year put it in and we'll give you an automatic credit when
you watch a movie.
J. DeFranco Put that in with your bill.
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ECHOSTAR PAGE 24
C. Ergen And here's the Dish Flicks which if you like movies this is
all the movies that we have, it's hundreds and hundreds of
movies each month from Dish Flicks. So people who join Club
Dish and send some referrals it's a great benefit. It's a
great benefit to us, it helps us keep our price down. It's a
great benefit to you and it's a great benefit to the
customer you refer.
J. DeFranco And you know that is truly the best way that you can build
your business is to take care of your existing customers,
then they want to tell other folks about it, and they still
want to tell them so that's why we take care of you. We've
got Michelle calling, let's see if we can answer her
question. Michelle, are you there?
Michelle Yeah, I'm here.
J. DeFranco Welcome to the Charlie Chat. What can we answer for you?
Michelle Thank you. First, Dish is great, we just got it maybe two
months ago, great picture, we really love it. Question about
the Club Dish. The certificates, when do you have to ...
what do you do with them? I guess is what I'm asking.
J. DeFranco Let's go through the process a little bit. Good question,
Michelle.
C. Ergen You're going to get these two certificates and ...
J. DeFranco You actually just write your name right here in the spot
where it says a special gift for ... you put their name in
and from you. And then this has all the information about
our service and the offer that we make to the person you're
referring and they have an opportunity to get a special
offer so it's a little bit better than what we would offer
to someone who just sees one of our ads and calls in. So
actually it's about a $50 extra value so they're getting
something extra out of the fact that you referred them so
you can feel comfortable that you're doing them good
justice. Of course obviously you're happy with the service,
that's the most important thing. And then they will, when
they call in, we'll ask for the number, there's a number if
you notice on the bottom of the certificate, a certification
authorization number and that number that's on this
certificate is tied to you. So when they activate you don't
have to be on the
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ECHOSTAR PAGE 25
phone with them or anything like that. When they activate we
ask for the number. There's a special phone number they
call, by the way, and our customer service agents are very
familiar with the Club Dish program and then they take that
number down. They take care of the customer of course, set
up their free installation for them, talk about the options
we have as far as programming and the way they can sign up
for the Dish Network service and then once that's done and
they sign up then you are entered into Club Dish and you'll
get a package in the mail that has the five Pay-Per-View
coupons. We'll register you, you'll start to see your $5
credit each month on your bill.
C. Ergen And there's a little tear off tag for the very bottom here
for your number that you keep for your records just in case
for some reason you don't get your $5 credit, then we can
track it down through customer service. How do they get
their certificates in the first place?
J. DeFranco Well, what we've done, we have mailed some of these out
randomly to some of our customers, but if you're interested
and you're watching and you'd like to participate you can
call our 800 number, 1-800-323-DISH and tell them you're
interested. Obviously you're an existing customer and you're
interested in participating in Club Dish and you'd like some
referral coupons and they'll send you a package.
C. Ergen If you really talk about Dish Network and refer people you
could really watch TV for free, you can watch all your
channels for free every year. All you've got to do is refer
some folks to us.
J. DeFranco And speaking, Charlie, of loyal customers, we have a story
here that's kind of a human interest story that's really a
neat deal. Let's take a look at that.
---------------
VIDEO
Announcer Make no bones about it, this family is full of happy Dish
Network customers. Dan and Diane King are in fact one of our
longest running Dish Network customers.
Dan It would have been in 1996, it was early on in the Dish
Network kickoff.
Announcer Dan and Diane have literally watched our company grow up
right before their eyes, from our first launches to the
first Charlie Chat, to remember this? Dish Man [repeated
several times].
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ECHOSTAR PAGE 26
Yes, Dish Man. Dan and Diane are technical kind of people,
they build and fix computers for a living and they say that
one of the things that has kept them with Dish Network since
the beginning is the fact that we've always been on the
cutting edge of technology.
Dan I guess I'm a technical person at heart anyway and I always
liked the latest and greatest and have been involved in
EchoStar products and the three major dish areas back in the
old days when you had to do a lot of your own setup and so
forth. And it was just very convenient, it was nice to be
able to go to the small size dish and actually have higher
picture quality than you got off a 10 foot dish.
Announcer They also say our product has stood up to the test of time.
Dan says the only problem they've had with Dish is
surprisingly the big scratch on his big screen TV.
Dan We have a couple of yellow Labs that are hunters and the
picture quality was good enough that one of them went on a
retrieval into the TV screen to try to get a bird. So
they're dumbfounded when they see an animal run across the
screen and disappear off the other side.
Announcer Well, Dan, we've always told you our picture is crystal
clear. Now the Kings love their dish so much that Dan always
takes the dogs and the dish on those hunting trips.
Dan Just couldn't be without it.
Diane He's cranky if he doesn't have his satellite TV.
Dan It's very handy to be up hunting and know from watching, for
instance, the Weather Channel what the weather's going to do
the next day and we're watching crystal clear television at
11,000 feet, 40 miles from pavement.
Announcer The Kings say they will always be a part of the Dish Network
family. And, oh, by the way, you guys, watch the Charlie
Chats too.
---------------
J. DeFranco Okay, that's an interesting story. Dog jumped into the TV
set.
C. Ergen That's a first.
J. DeFranco That's a pretty realistic picture. Okay, Charlie, we've got
another give away. This is actually from our friends at
Tribune, so these are the folks that publish Dish
Entertainment Magazine and this is pretty unbelievable
actually.
C. Ergen Let's do it.
J. DeFranco Hold it up, we've got an annual subscription to Dish
Entertainment Magazine, but also a 400 watt Kos Dolby
Digital home theater surround with multi format DVD player.
So this will really, really make your satellite TV sound
great, if you don't have your ...
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ECHOSTAR PAGE 27
C. Ergen Plus you have DVD there too.
J. DeFranco And DVD, yeah, so if you don't have it going through
surround sound now you won't believe the difference this
makes with Dolby digital. So the question is who was on the
cover, is that this one?
C. Ergen I don't know. Ask the question.
J. DeFranco Who was on the cover of last month's issue of Dish
Entertainment Magazine? I don't know if that's this month's
or last month's.
C. Ergen This is April.
J. DeFranco Okay and then that's the number on the screen.
C. Ergen Is this for April or ... the question is for April? Oh,
February.
J. DeFranco March.
C. Ergen February.
J. DeFranco So we can show this one.
C. Ergen This is Larry King and Larry King would not be the right
answer.
J. DeFranco So it's March.
C. Ergen So it would be whoever was on the March cover of Dish
Entertainment Magazine. I should say that Dish Entertainment
Magazine is different, it shows all the channels that we
have. And it's how much a year? I don't know how much it is,
$42?
J. DeFranco It's $39.99 for a full year or $3.95 a month.
C. Ergen And this shows all the channels as opposed to Dish Flicks
which shows just the movies.
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ECHOSTAR PAGE 28
J. DeFranco Okay, so we'll see, we'll see. Why don't we take a few more
questions, Charlie, and we'll see if somebody can win that
great prize. That's a pretty darn nice thing here. So this
is from Cy Gervais, I believe. He says if the merger with
DirecTV is approved what equipment will we need, Dish
Network equipment or DirecTV equipment? Also, I think we
might have answered this a little bit, also what personal
video recorders can we expect after the merger?
C. Ergen In terms of equipment we both use incompatible systems so
two different standards. We use an impact DVB standard, they
use a DSS standard and we haven't made the final decision as
to which products we would replace. But the odds are you
won't have to replace your equipment. But if you do have to
replace your equipment then to receive all the things that
you still receive today will cost you ... we'll do it for
free, so we'll upgrade you absolutely for free in terms of
equipment so there's nothing to worry about there and in
fact you may get some newer equipment.
In terms of PVR we'll continue certainly with our own
technology since we don't have to charge for it. We also
plan to continue with the contracts that DirecTV has with
the Ultimate TV folks and the TiVo folks. And again those
folks charge a monthly fee, they have some software features
and things that we don't have on our products that make
their systems unique and maybe they'll change their pricing
or whatever, but we'll continue those contacts that we have
with DirecTV. So you'll probably have at least three
different kinds of PVR devices with the merger.
J. DeFranco You know, Charlie, as you mentioned earlier next month we
will have Tech Forum, that's May 13th, let's actually give
our folks a little taste of that.
---------------
TECH FORUM VIDEO
Tech Forum, the show that answers all of your technical questions. Tune in
Monday, May 13th and get the latest on high definition TV, personal video
recording, interactive TV and so much more. Call in or email with all of your
technical questions. Tech Forum, helping you get the most out of your Dish
Network service.
---------------
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ECHOSTAR PAGE 29
C. Ergen That's with Mark and Dave.
J. DeFranco Is that what it is? Tech Forum with Mark and Dave?
C. Ergen That's right and we don't let our engineers out in public,
but we will let them be on TV to answer questions. A lot of
times we get technical questions, a lot of questions we get
here are technical questions and we sometimes get stumped
occasionally. But you'll never stump our engineers because
they've designed the system from the ground floor up and
additionally it's a great opportunity for them to hear the
kind of things that ... the products you'd like to have in
the future. And again I think that just like the customer we
had on tape there I mean I think at Dish Network a lot of us
are hobbyists that just want to try to improve the
technology and make it better, and better, and better
because we love the technology with satellite, we do. And we
try to compete with ourselves really in terms of making
products that are easy for you to use and inexpensive and
that kind of advance the technology and the PVR is just one
example of that, high definition television is another.
J. DeFranco Okay. Charlie, let's take just this one last question. There
has been some advertising recently and Frank wants to know
are we considering offering satellite radio subscription as
part of our Dish Network package? And obviously we have some
radio channels. I think he's probably referring to what ...
he has seen some ads probably recently.
C. Ergen There's two satellite radio providers, one is called XM
Radio and one is called Serious Radio and we're evaluating
both those products now and both of them are around $10 or
$12 a month for about 60-100 channels, radio channels. And
again we'd have to have some kind of business arrangement
with them to offer that. The product is typically installed
in your car so there's some cost for the equipment and
installation and so forth and so on. So we're evaluating the
product today and we hope to make a decision. Some of the
services are relatively new, working through some of the
kinks and bugs in the services and it sounds pretty good and
if we have an announcement there, we'll certainly let you
guys know. It is a logical kind of thing for us to do.
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ECHOSTAR PAGE 30
J. DeFranco Okay, Charlie, we have a winner of the great surround sound,
DVD and a year of Dish Entertainment Magazine, a guy from
Houston, Texas. The answer was Jennifer Anniston. So
Jennifer Anniston was on last month's cover of Dish
Entertainment Magazine. Okay, we're getting a little short
on time. Any closing comments, Charlie?
C. Ergen We appreciate everybody's business and we're looking forward
to lighting up EchoStar VII, improving our service a little
bit and hopefully having some more local cities. And
hopefully your technical questions that we couldn't answer
tonight you'll get answered on the next chat and we'll see
you then ... we'll see you the one after that I guess.
J. DeFranco That's right. Thank you for joining us and we appreciate all
your support.
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