Form 425: Retail Charlie Chart
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
Commission File No. 0-26035
General Motors Corporation
Commission File No. 1-00143
Date: March 21, 2002
On March 21, 2002 the advertisement set forth below was distributed and the
Charlie Chat television show, a transcript of which is set forth below, first
was rebroadcast.
TODAY, 42 MILLION AMERICAN HOMES HAVE LITTLE OR NO REAL ALTERNATIVE TO
CABLE FOR LOCAL PROGRAMMING.
TOMORROW, THEY WILL.
[Map of the United States with portions in color]
[Colored box.] TV Households With No Competitive Alternative Today
[Map of the United States entirely in color]
[Colored box.] TV Households With Competitive Alternative After Merger
TOGETHER, ECHOSTAR® AND DIRECTV® WILL BRING LOCAL TV CHANNELS AND
AFFORDABLE HIGH-SPEED INTERNET TO EVERYONE IN AMERICA--VIA SATELLITE.
The EchoStar/DIRECTV merger will give consumers a real alternative to rising
cable rates--it’s called “Local Channels, All Americans.”
How is this possible? With the combined resources of both EchoStar and
DIRECTV, we’ll be able to eliminate 500 duplicate channels, freeing up that
space on our satellites to offer local TV channels. Plus, we’ve got two
advanced spot-beam satellites already in orbit, two more slated for launch, and
a fifth new satellite planned for construction as soon as our merger is
approved. So the merged company will be able to offer all Americans access to
local broadcast channels with digital-quality picture and sound, as well as
high-speed Internet service via satellite.
And under our plan, everyone will pay the same price for the same service,
whether they live in a village of five homes or a city of five million.
More choice, more freedom--for all Americans.
| [ECHOSTAR logo]® |
[DIRECTV logo]® |
WHAT DOES THE MERGER MEAN FOR YOU IN UTAH?
- UTAH'S MORE THAN 700,000 HOUSEHOLDS will have access to their local TV
channels via satellite.
- EVERY UTAH FAMILY will be able to get high-speed Internet service via
satellite.
Hughes, HEC Holdings, Inc., GM and EchoStar intend to file materials with the
Securities and Exchange Commission, including a proxy or consent solicitation
statement/prospectus, which will contain important information regarding the
proposed combination of Hughes and EchoStar. A registration statement, including
a preliminary draft consent solicitation statement/information
statement/prospectus has been filed with the SEC. We urge stockholders to read
these documents, which are or will be available for free at the SEC’s
website, www.sec.gov and from GM. Information regarding the participants in the
solicitation of GM stockholder approval was filed with the SEC by EchoStar on
November 1, 2001 and by each of GM and Hughes on November 16, 2001. This
advertisement contains forward-looking statements that involve known and unknown
risks and uncertainties, including the risks described in the SEC filings
referenced above. If any of these risks or uncertainties materialize, our actual
results could differ materially from the expectations in these forward-looking
statements.
©2002 DIRECTV, Inc. DIRECTV and the Cyclone Design logo and FEEL THE JOY
are trademarks of DIRECTV, Inc., a unit of Hughes Electronics Corp. All other
trademarks and service marks are the property of their respective owner.
©2002 EchoStar Communications Corporation. All rights reserved.
In connection with the proposed transactions, General Motors Corporation
(“GM”), Hughes Electronics Corporation (“Hughes”) and
EchoStar Communications Corporation (“EchoStar”) intend to file
relevant materials with the Securities and Exchange Commission, including one or
more Registration Statement(s) on Form S-4 that contain a prospectus and
proxy/consent solicitation statement. Because those documents will contain
important information, holders of GM $1-2/3 and GM Class H common stock are
urged to read them, if and when they become available. When filed with the SEC,
they will be available for free at the SEC’s 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. Such documents are not currently
available.
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 GM’s solicitation of proxies or 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 prospectus and proxy/consent solicitation statement
if and 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
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.
RETAIL CHARLIE CHAT
March 15, 2002
Introduction
››You have a show? Is that right?
››That’s correct.
››That’s what is says here on the script.
››That’s what it is.
››The amazing thing is, I think we’re ahead of these guys this
time. Instead of asking questions we’ve got answers, we’ve got
plans.
|
| J. DeFranco |
Welcome to the Chat. What can we answer
for you today? |
| C. Ergen |
See if our customers want it and if we
can get something that’s attractive for our customers, we’ll be
in there trying to get it. We’re really proud of the effort that a lot
of the [inaudible] retailers made and a lot of our
employees. |
| J. DeFranco |
It’s a great offer for the customer,
a huge opportunity for you to improve your revenues. Tell them why, or you
want me to tell them? |
| C. Ergen |
You can tell them. We’re open to suggestions. If
you’ve got things ... anybody who wants to take the time, we’d
appreciate it. |
| ››Hello, and welcome to the Charlie Chat, another
busy broadcast as we begin our countdown to Team Summit 2002. As always,
we’ll take your live calls and your e-mails, so let’s begin.
Here’s Charlie Ergen and Jim DeFranco. |
| C. Ergen |
That’s a little risky, but we’re having fun. |
| J. DeFranco |
Hello! Welcome to the Charlie Chat. We’ve got a great
show for planned for you today, a lot of things to talk about. Obviously
the business is moving very quick. We’ve got some new pricing which
also amended some of our promotions, made them better. It’s one of
those “you asked for it, you got it” based on feedback we got from the
retailers. |
|
In addition to that, we have some announcements on Club Dish,
Charlie, on the winners of our sweepstakes. We also have announcements on
our incentive trip for this year, so a lot of great things. |
|
I know you’ve been very busy in Washington relating to
the merger and one thing or another, you’ve been talking to some of
our congressmen and senators, I believe. Maybe you can tell us a little bit
about what’s been happening. |
| C. Ergen |
Well, I’ve talked to a lot of people. Nice that
we’re coordinated today. That’s got to be a good sign for this
show. But the merger still ... I’m probably spending most of my time
on the merger today and obviously a lot of that’s with the regulatory
folks, what you read about in the paper mostly is really what happens on
Capitol Hill in terms of hearings. I can’t remember, I don’t know
if I was here on the last Chat, I must have been at hearings for the
Judiciary Committee. Obviously you read a lot. The merger’s going much
better than you probably read in the paper in the sense that obviously the
facts and the real key to economic analysis of the merger and so forth is
done behind the scenes and it’s done by very sophisticated people who
are looking at facts as opposed to the political consequences of any kind
of merger. |
|
So things are going well there. Again, we still have ... we
expect some time late summer before we get final approval of the merger at
the earliest. A lot of the things we’ll talk about at Team Summit, one
of the big things we’ll talk about there is how the merger affects you
guys and the benefits of that and how you might want to make sure that you
know where the opportunities are for the merger so that you, as you
structure your business going forward, where you make investments in your
business and where you focus your business, you know that that’s the
place where the merger is going to need help. |
|
Just as an example, obviously we’re going to transition
millions and millions of people to a standard platform. That means that
installation and service are going to be at a premium, it means we’re
going to get incremental customers that we otherwise wouldn’t have
gotten because we’ve got high definition television, we’ve got
locals in all 210 markets. Because we’re going to get incremental
customers, you’re going to want to grow your business because
you’re going to get your fair share of those customers if you’re
doing a good job in your marketplace. So take a market at Little Rock,
Arkansas. Today, if you’re a retailer out there today, if you
don’t have local-to-local, with the merger - you won’t have
local-to-local without the merger with the merger you do have
local-to-local, your business is going to grow because you’re
going to be more competitive with caqble. So that’s
certainly one of the things we’ll talk about at Team Summit. |
|
But we’re not going to have lots of news on the merger
in terms of announcements because most of the things that we’re doing
are very private with the regulatory authorities and we’re supposed to
have hearings tomorrow on the commerce side. Those hearings were cancelled,
so the Washington stuff is winding down in terms of our focus there and
most of our focus becomes things that are not public within the, with the
regulatory officials. Again, I think people will continue to have
questions, there just won’t be answers and we’re certainly not
going to talk publicly about the kinds of discussions we have with the
regulatory authorities. |
| J. DeFranco |
Is there anything, Charlie, that the retailer should be doing
at this point? |
| C. Ergen |
Yeah, I think if you are a retailer and particularly those of
you who are in market, 50 through 210, where you’re not likely to get
local-to-local without the merger, so if you’re in a city today that
you don’t have local, you certainly should be talking to your senator,
your congressman about this merger particularly as spring break starts the
end of this week and your senators will be back in their home districts,
you should make an appointment and go see them and talk about how the ...
whether you believe the merger is beneficial or not. If you think that you
want to grow your business with high definition television, if you think
you want to grow your business with broadband, these are things that are
essential for us to be able to compete with cable. |
|
If you want to continue your business which has matured, I
mean our industry is going to be smaller this year than it was last year,
it was smaller last year than it was the year before. If you want to be in
a mature industry where we’re not growing that rapidly or our growth
is actually slowing down and some of you folks already see that in your
business today, then you should be against this merger. But for most
people, I think, you want an industry to grow and compete. So you should be
talking to those folks and if you don’t do anything, then sometimes
things don’t happen. |
|
So they want to hear from folks. One of you going in and
seeing a senator is a lot more effective than me going in to see a senator
because you’re a real constituent, you’re a real voter, so
that’s an important thing to do. |
|
On our website, I know that we have the ability for you to go
in and write to your senators and congresspeople. That’s an important
thing to do and I think you just go to our website. I’m not sure how
you get into that particular ... I don’t know what you click on to get
into that. |
| J. DeFranco |
“Take Action.” First you go to the website, to
www.EchoStarMerger.com and then you go and click on “Take Action.” |
| C. Ergen |
That was kind of hard to see. “Take Action” is up in that
righthand corner and then you can draft your own letters and so forth.
Those are the important things to do. |
| J. DeFranco |
Okay, so good update. Charlie, before we get into the rest of
the meat of the show, I know we’ve got some folks out there that just
are on the edge of their chair wondering how the sweepstakes came out for
Club Dish. |
| J. DeFranco |
You should be! This is pretty exciting! I mean we gave away
three great prizes. One is we’ll have our third place winner joining
us at Team Summit. To tell you a little bit about it, every Club Dish
activation that you get, assuming of course you’re registered as a
Club Dish retailer and you’re in good standing and so on and so forth,
puts you into a pool and we drew those consumers out of there that were
active and then therefore determined who the winners are. So third place
won a trip to Team Summit. We’ll see them next month and that’s
GMat TV & Appliance out of Green Bay, Wisconsin. Congratulations to
you. |
|
The second place winner, actually this is awesome, out of
Wichita, Kansas, got a Dish Network van. |
| C. Ergen |
Get out of town! |
| C. Ergen |
A used van, right? |
| J. DeFranco |
Well, no, this would be a new van. We thought about giving
away a used van but that was ... |
| C. Ergen |
A new van? And that’s only second prize? |
| J. DeFranco |
So you mean you didn’t know about this, huh? |
| J. DeFranco |
Well, wait until you hear this one. So the first place ... |
| C. Ergen |
... our stock price is going to go down two bucks. |
| J. DeFranco |
First place winner, I’m happy to day, L&J Sales out of
Alabama won $100,000, $100,000 and understand ... |
| C. Ergen |
... Jesus Christ ... |
| J. DeFranco |
Understand we’ve got them on the phone. Maybe we can ... |
| C. Ergen |
A hundred thousand bucks? |
| J. DeFranco |
A hundred thousand dollars. |
| J. DeFranco |
Is John on the phone? |
| J. DeFranco |
John! Welcome to the Charlie Chat, congratulations. We
appreciate your support of Club Dish and tell us a little bit about how you
support Club Dish and how do you feel about this? |
| John |
I don’t know how I feel right now, Jim. I’m
speechless. |
| J. DeFranco |
A hundred thousand dollars is a lot of money. |
| John |
... I don’t know. Dish Network has been a wonderful
company to be with. I’ve been with you about four years now. I
transferred from the other guys and it’s the best thing that ever
happened to me. It really is. Club Dish came out, I never thought anything
like this would happen. I’m speechless. I don’t know what to say.
It’s unbelievable! Club Dish Referral Program has worked great for my
company. I think that speaks well maybe of us in the sense that we would
not get referrals if we weren’t taking care of our customers. |
| J. DeFranco |
That’s right. Let me just ask you a couple quick
questions so maybe our other retailers can relate to you a little bit.
John, about how many activations do you do a month? |
| John |
Probably around 100 to 150. |
| J. DeFranco |
Okay and is that out of one store location? |
| John |
One store location, yes, sir. |
| J. DeFranco |
Great and just out of curiosity, about how many referrals do
you get a month, how many Club Dish? |
| John |
Club Dish referrals, we probably have gotten, oh, ten to 15
per month since it started. |
| J. DeFranco |
That’s great, so about 10% of your activations are
referrals. You know, Charlie, I mean we talked about it over and over. |
| C. Ergen |
Imagine if you could grow your business 10%. |
| J. DeFranco |
That’s right. |
| C. Ergen |
If everybody out there could grow their business 10%,
that’s usually the difference between making money and not making
money. |
| C. Ergen |
And by the way, you need a tax accountant now. That’s
your first call. |
| C. Ergen |
Because you don’t want to pay taxes on that. |
| John |
I’ve watched your show so many times wanting to get on
and ask you questions and now I’m on, I have nothing to say, my mind
is just blank. [laughter] |
| C. Ergen |
Are you in the Birmingham DMA or are you selling where you don’t have ... |
| John |
Birmingham DMA, yes, sir. |
| C. Ergen |
The local-to-local is helping you as well? |
| C. Ergen |
Can you imagine what ... |
| John |
That has helped us tremendously, tremendously. |
| J. DeFranco |
Again, thank you very much for all your support, John, and
congratulations on being the lucky winner of that $100,000 and we’ll
certainly look to hear more from you in the future. |
| John |
Well we’re planning on being here and I appreciate you having me on your
show and thanks a million for being there. |
| C. Ergen |
Well thanks $100,000-worth and hopefully you’ll come to
Team Summit, we’ll see you there. |
| J. DeFranco |
Okay, take care. Alright, so, John, I mean obviously he ...
fundamentals ... |
| C. Ergen |
What’s interesting there I think is that his business is 10% higher
than otherwise would be with the referral program and that ... do that across
the board, that’s an amazing thing and again it’s probably because he
takes care of his customers. The referral program doesn’t do much for you
if you’re not taking care of your customers because they won’t support
you, but when you do take care of your customers and that’s the kind of
retailer that’s going to do the very, very best with the merger because
their customers are going to be looking to them for the transition, they’re
going to be looking to them for the answers about how this all goes together,
the new services that we’re going to have and they’re just going to be
in great shape. |
| C. Ergen |
As a matter of fact, we do have ... let’s show a little
clip on Club Dish. We have a new Club Dish program that’s rolling
right now. Let’s take a look. |
Club Dish
Congratulations to the winners of the Club Dish Sweepstakes. Hi, I’m Amy
Mackenzie from Dish Update and I’m here to tell you that retailers’
sweepstakes are just one of the great benefits to being a Club Dish retailer.
The beauty of this program is that it’s designed to be a cost free referral
program to help drive customers to your store. We send the current customers the
tools to refer their friends back to your store. It’s easy. When you
activate a new customer, you tell them about all the benefits of Club Dish and
how to get $60 just for referring Dish Network and your store to their friends.
Your customer calls to request Club Dish certificates. They receive two
certificates to give to their friends, family or neighbors. They come in to your
store and purchase a Dish Network system. Then, they’ll tell two friends
and they’ll tell two friends and then they’ll tell two friends and so
on and so on and so on. Everybody’s a winner with Club Dish. To take
advantage of this great program, just go to the retailer website and click the
Club Dish link.
|
| J. DeFranco |
Okay, Club Dish. So we will be talking about this at Team
Summit. Obviously if you’re not participating, you should be. We
actually have, starting February 16th we started a new Club Dish program
and also along with that we’re starting a new sweepstakes. |
| C. Ergen |
I got something here on Club Dish. I don’t know what that is. |
| J. DeFranco |
That’s it. Well, you can open it up while I’m
talking and we can take a look at that. |
| C. Ergen |
It looks expensive. |
| J. DeFranco |
So what we have done is obviously we had that sweepstakes last year to
get all the retailers excited about Club Dish. We don’t want you to forget
about it. We won’t be giving away another $100,000, Charlie, but we will be
having a Club Dish retailer join us on our next incentive trip which we’re
going to talk about in just a minute. |
| C. Ergen |
So what are these packets? These things we send to the
customer or the retailers? |
| J. DeFranco |
That’s what we send to the customer. |
| C. Ergen |
A letter from me. A letter from me - that’s ... |
| J. DeFranco |
How much is that worth? |
| C. Ergen |
Not much. [laughter] Not much, but this is worth $60 because every time
they refer somebody they get $60, they get $5 a month credit for 12 months and
then they get ... that’s what the current customer gets, right? Plus
he’s in Club Dish so he gets a special toll-free number for customer
service, there’s a certificate. This is what they give away to their
friends, a certificate, nice expensive looking certificate, a very special gift
for somebody with all the channels in the back. Or they get more than that, they
get two certificates. |
| J. DeFranco |
Yeah, they get two, so they can refer two people. |
| C. Ergen |
Okay and they get whatever else. |
| J. DeFranco |
And the existing customer also gets some free Pay-per-View
coupons, they get a free movers if they should move over the course of
while they’re a Club Dish member, so that’s for the ... |
| C. Ergen |
Again, most of Club Dish is suggestions from retailers. As
you use it and as you find things that work and find things that don’t
work. You know, again, we’re happy to look ... if you can get to me
and Jim, we look at our e-mails and we read them and if you can call us or
at Team Summit probably the best time is at Team Summit when you get a
chance and come up and introduce yourself and give us the suggestions. We
all get together after Team Summit as a group, as a company, and we go over
a lot of the ideas that we’ve heard and we try to put the best of
those ideas and plans in action. Sometimes it may take a few months. You
may give us ideas at Team Summit in April, you may not see the actual
action plan until August. It takes time to do it and some things we just
can’t do because of the way our systems work. But that’s where
most of the things come from. |
| J. DeFranco |
Okay, so, Charlie, I mentioned that our top, or actually not
our top one, we’re going to do a random drawing similar to what we did
with the three winners here so every activation that you do through Club
Dish, make sure you’re registered as a Club Dish retailer, that’s
important and then every activation that you do, we’ll give you a
chance to win a trip to this year’s incentive trip which we will have
next year and that is to Cabo, Cabo San Lucas. I haven’t had the
opportunity to go there but I understand you been there. |
| C. Ergen |
I just went there and it is a fantastic place with an awful
lot of stuff to do from scuba diving to sailing to dune buggy riding, to
golf, to the beach and you’ll be happy because they’ve plenty of
tequila there and sunsets. |
| J. DeFranco |
Again, it’s very exciting. We’ll ... |
| C. Ergen |
... a little bit easier for people to get to, it’s only
a couple of hours from Los Angeles, only a couple of hours from Denver,
it’s only an hour and a half from Texas or an hour from Texas,
it’s a little bit farther from the East Coast but certainly not as far
as Hawaii and again, the accommodations are going to be great. |
| J. DeFranco |
As always, it’ll be a first class trip. |
| C. Ergen |
It will be, I think it’s going to be a week, I think
it’ll six nights, seven days, so it’s going to be a lot of fun
and kind of a different place than we’ve been before in terms of some
of the activities and we’ll be there probably after, just after the
spring break crowd, so we will become our own spring break crowd there.
It’s a very popular thing with all the kids and it’ll be a lot of
fun. |
| J. DeFranco |
So we’ll share more details with you on future Chats,
but we want to remind you and we actually have a new category, Charlie,
this is something you brought up a couple of Chats ago, but first
let’s go through the winners, how you win this trip. So the top 75
retailers, this is for the calendar year of 2002. We’ll have 12
quarterly random drawing winners, so three a quarter will win and you have
to have ... we talked about this before, first quarter a minimum of 100
activations, second quarter 125, then 150 and 175. So as long as you hit
that level, you’ll be put in a random drawing with people that have
those minimum activations for the quarter. We’ll actually be
announcing that potentially on the next Chat or maybe even at Team
Summit. |
|
We’ve
got random drawings, obviously ten folks, retailers out there that you may have
one, 10, 20, activations for the year. You still have a chance for every
activation you do, you have a chance to win one of these trips. We’ll give
ten of those away and then, Charlie, obviously we’re reinforcing retention,
how important retention is, customer retention, providing good service to our
ten retailers that have the best retention statistics will also join us. They
have to have a minimum of 600 activations and then this is the category you
talked about. We have a new category. We’ll have ten winners that join us.
This will be a random drawing but you will have had to have been a retailer
prior to December 31st, 1998, actually prior to January 1st and in addition to
that, have cumulative, cumulative activations of 600 active customers and
obviously be in good standing and all of these require, in fact you can go to
the retailer website and see all the specific rules, but you must be in the
white category, from a retention ... |
| C. Ergen |
Everything is retention based, it’s just that you have
an extra added chance to win if you’re in the highest levels of
retention. |
| J. DeFranco |
That’s right. |
| C. Ergen |
And you have no chance if you’re not in the white
retention area, so if you’re just out there not taking care of your
customers and you’re on average a lot worse than our average
customers, then you’re not one of our ... it doesn’t help us, we
don’t make money on that, so you see our focus a lot more taking care
of customers. Our friend from Alabama who did the team, he’s got a
good shot. If he’s doing 100 a month, he’s got about four or five
different ways to win in this. |
| J. DeFranco |
And the pace for the top 75 at this point is 590 activations,
so that gives you a little frame of reference. So from the first of the
year, if you run into being the top 75, that’s about where you need to
be. But again, Charlie, the key here and we’ve gotten a lot of good
feedback from retailers of having these multiple ways to win because
it’s a lot of fun to have retailers join us on these trips when they
won from different categories, weren’t necessarily our largest but did
a good job, work hard every day and it’s going to be interesting to
see the folks that were retailers prior to 1999, the ones that have 600
total, that’ll be fun. |
| C. Ergen |
We probably know all those folks, for sure. Some of the new
people I don’t know very well. What else’ve we got? |
| J. DeFranco |
We have Team Summit coming up. We want to talk a little bit
about that. Let’s just take a look at this clip. |
| If your richest relative buys a new house and you have to
help take the wheels off of it, if you refer to the fifth grade as my senior
year, if you’ve ever taken a beer to a job interview, if you can burp and
say your name at the same time, you might be a redneck. |
| J. DeFranco |
Okay, so Jeff’s going to be joining us. He’s a
funny guy. |
| C. Ergen |
A very funny guy. |
| C. Ergen |
He is a funny guy, so we look foward to seeing him in person.
We did cut off the registration on the 15th, so Friday was the cut off for
Team Summit. |
| C. Ergen |
Well, no, you’ve got to be able to still register. No, no. |
| J. DeFranco |
Well, Charlie, it’s coming up. |
| C. Ergen |
You’ve got to be able to still register, if you ...
right? If you’re listening to the show you’ve got to be able to
... you may have to pay more money to go or something, but you’ve got
to be able to still register. Right? As long as you have space there,
because this is the most important ... If you don’t do ... Again, I
can’t say it enough, if you’re serious about the business, if
you’re not at Team Summit and you’re calling and complaining
about your business, I don’t take a lot of stock in it. |
| J. DeFranco |
That’s a good idea. I think we should get a list of the
retailers that are at Team Summit. |
| C. Ergen |
Well, I know, I know, I talk to retailers all the time. I say
you’re talking about your business and I say were you at Team Summit?
“Well, no, I didn’t have a chance to go,” I was this, that,
whatever, I couldn’t go, whatever and they’re complaining ... and
we ... probably ten things we went over at Team Summit they’re asking
me about that really would have improved their business. So particularly
with the changes in the industry, particularly with the merger going on,
it’s very important for you to see how new technology like high
definition television, broadband are going to affect your business, how the
merger is going to affect your business, how things like Club Dish and some
of the promotions and advertising things that we’re going to be doing
throughout the year are going to affect your business. |
|
It’s very important and you learn a lot more from the
other retailers that are there as well about what they’re successful
at. It’s important that you come to Team Summit. I would say that if
people still want to register this week, they ought to be able to do it.
You know, this is EchoStar, we’re not a big |
|
company, we can register people this week, we just may have
to jump through some hoops and get some more rooms, but we ought to be able
to do that.
|
|
Yeah, okay, they can do it. Oh, good. |
| J. DeFranco |
Okay, so one week only. |
| C. Ergen |
Now what are the dates? I know we ... what are the dates of Team Summit? |
| J. DeFranco |
April 17th to the 21st? |
| C. Ergen |
The 17th is a Wednesday. |
| Roberta |
The 17th is a Wednesday. |
| C. Ergen |
So we’ll have at least ... we know we’re having at
least a reception on Wednesday night and registration. |
| Roberta |
We’re having a huge party in the park with the ABC Cable
Network Group with Disney. We’re going to MGM Studios, so Wednesday is
a very fun night. |
| C. Ergen |
Most of the educational stuff will be Thursday and Friday. |
| Roberta |
Correct. And Saturday. |
| C. Ergen |
Saturday, also educational stuff, it’s also kind of a
free day for them to go to the parks if they want to and then Saturday
night’s our closing. |
| C. Ergen |
Right? So Thursday and Friday educational stuff going on, tradeshow, seminars. |
| Roberta |
Twenty-four workshops. |
| C. Ergen |
Twenty-four different workshops. We’ll have more
details, I guess, in the Fax Blaster on the website I guess, we have
details. |
| Roberta |
The full details are on the website. Retailers can continue to sign up for their
workshops through the 25th of March. We have ... I don’t know if you heard
that we have 23 or 24 classes that are up at our ... a good portion of them are
different than last year and a good number of them are more advanced level
classes because that was feedback that we received from you from past Team
Summits, that you needed to have more workshop opportunities, so that will be
the case as well. |
|
We’ll
have a full tradeshow as we’ve always had in the past, so if you
haven’t signed up for Team Summit, I know a lot of you already have and
we’re getting close to the dead... close to end here. Please do so. We can
extend the deadline, we will work on getting rooms to accommodate you but if you
could sign up for your classes by the 25th of March, that would really help out
because then we can make sure that everybody has a seat as it’s been
difficult sometimes in the last couple of years with popular classes. So sign
up. |
| J. DeFranco |
Okay, thank you, Roberta. |
| C. Ergen |
And I know like Saturday night, who do you have ...
there’s something like B52s Saturday night. |
| Roberta |
Right, Saturday night closing ceremonies, our party MTV Networks is sponsoring
the B52s so we have a concert with the B52s on that night. We have a lot of good
entertainment coming, Eric Heathery from Great American Country, he’s an up
and coming country star and he’s going to be performing on Friday night. |
| J. DeFranco |
And I heard that Larry King couldn’t wait to talk to
you, I heard he was going to come in ... |
| C. Ergen |
Well, I don’t know. I just show up. They give me my
schedule when I get there. |
| J. DeFranco |
Okay, so again, very exciting Team Summit. If you’re
serious about your business, make sure you’re there. We will have a
lot of support. |
| C. Ergen |
Team Summit, I have something that said “Team Summit
questions.” Was there a website for Team Summit questions? I don’t
know if they put that up ... there it is. |
| Roberta |
We’ve got an email box at Team Summit @EchoStar.com and
those questions are answered every day. |
| J. DeFranco |
Charlie, we’ve got some programming announcements. I
know the people in these regions are going to be real excited and that has
to do with regional sports, so we actually have some additional areas, some
zip codes that we’re adding and this is not us, this isn’t up to
us, in fact, why don’t you talk briefly about the regional sports and
how that works because I know a lot of times people think that we’re
the ones that set the standards for where they get which regional sport and
that’s not the case. |
| C. Ergen |
Well, by contract, the regional sports teams, both with us
and then with the sports leagues have zip codes that they’re
authorized to sell their sports teams in. We don’t control that
whatsoever, so you don’t get a choice, but sometimes people live on a
border. One side of the street will get one sports team and the other side
of the street will get a different sports team because of the zip code. We
don’t control that but we just added in Oregon some zip codes that get
the added Fox Northwest, I guess, I don’t ... before maybe they
weren’t getting any Fox sports or ... |
| J. DeFranco |
They were getting Fox sport Bay area. |
| C. Ergen |
Oh, they were getting San Francisco, so these people live in Oregon and
they’re not going to get Oregon State and Oregon teams and they’re
getting Fox Northwest so hopefully for the most part unless they’re San
Francisco fans, they’re going to be happy, happier. But if they’re San
Francisco fans, we don’t control it because now the contracts that Fox has,
will get that. |
| J. DeFranco |
Actually I think they’re adding, they’re actually
not going to lose one here. |
| C. Ergen |
Oh, you’re kidding. |
| J. DeFranco |
No, so they’re going to get both, so they should still be happy,
at least in this case. Now like you said, there may be other times when that
doesn’t happen. Here we’ve got Indiana, those zip codes will be adding
Fox Midwest, so they’ll get the Pacers, okay and this also, my
understanding is it will become a dual territory. So they won’t lose the
service they had, but they will get the Pacers now. So they continue to ... I
mean those are, as you said, those are between the sports channels and some of
the pro teams and what they can do and can’t do. |
| C. Ergen |
And I guess the biggest question we’re getting about it is the S
Network that we don’t have any, do not have any announcement with the S
Network, we still continue to negotiate with the S Network. The season obviously
hasn’t started yet, the Yankees, but we do not have an agreement with the S
Network that we think is fair to our customers and that we can sign, so we
continue to negotiate with them, but we don’t know whether we’ll get a
deal done with them or not. |
|
Again,
I’m not particularly optimistic given that it seems like a pretty ... I
think the kind of general things that we thought are fair to our customers, are
pretty simple, and are pretty rational and we’re not sure how serious they
are about really having us carry the network based on the negotiations that have
gone so ... But you never know. It’s still probably ten days away from us
having to make a final decision to not carry it. If we can’t negotiate a
deal, we’ll certainly continue to look at it. We know people want it, we
know it’s important to people in New York so we know it’s important to
customers so within reason, we’d certainly like to be able to carry it, but
it has to be within reason to do that, so at this point in time nothing’s
announced there one way or the other. |
| J. DeFranco |
Okay, Charlie, we had an announcement that went out via Fax Blast, I
guess it was about a week or ten days ago, it was after I last ... what was it?
March |
|
8th? After our last Chat and that was a price reduction, for that price
reduction in the 301. So what we did was effective March 8th we lowered the
price of the 301 system to retailers, so to retailers to $149 and the
stand-alone price to, well, it was effective March 11th, the stand-alone price
to $99. Now effective the 25th is when the MSRP price will drop, so our
suggested retail price. So this gives the retailers an opportunity to go ahead
and sell through the inventory they have. Some which control their inventory
better and purchase more frequently from their distributors may actually have
had a chance to make a few dollars there, but in any event, you have two weeks,
you have two weeks to sell through the product before we actually lower the MSRP
price in the marketplace on the 25th, so that will happen on the 25th. |
|
Also
in addition to that obviously with the price drop we made some changes. I know
many of you are aware of this and the relationship between the activation
payments we do and the retail price we charge versus the dealer price, so
effective on the 25th additionally the AO payment, the additional outlet payment
will go back to $40 from $50. We’ve had it at $50 for a while because you
were paying a higher price for the hardware. So that’s the story there. |
|
In
addition to that on the 25th, equipment reimbursements will also drop, so you
can look at the new business rules. You will use the same claim forms. Is that
right, Mary? The same claim forms but you will get an adjustment obviously in
your reimbursement for those units because you paid less for them, so
you’ll get reimbursed less. |
| C. Ergen |
The bottom line is you have less investment in systems to go
out there and run your business and all the economics change kind of
accordingly with that. |
| J. DeFranco |
So we have a slate. Let’s put it up. This shows the majority of
the changes. You can see that DHP, the primary reimbursement will now be $99
because you’re getting $49.99 from the customer, Club Dish reimbursement is
$149, |
|
the additional $301 reimbursement so for additional receivers
is $99, free dish is $99, and in Club Dish is $149. And then the big dish
exchange of course is $149 because the MSRP is $149 and your price is $149.
And then 1-2-3 Great TV you get $99. That’s for the second receiver.
It doesn’t really say that there but, right, they get the money from
the consumer for the first receiver, so ... are we going to show more on
this? |
| C. Ergen |
We got some changes to the 1-2-3 Great TV. |
| J. DeFranco |
Well right. Actually yeah and this was one of those “you
asked for it, you got it,” so actually let’s go ahead and show
that slate. So the customer purchases a system for $149, that’s for
their first receiver. They get the second receiver free, they get up to AT
153 for three months, so whatever they subscribe to is what they will get
for free for three months. In addition to that, the AO fee and the locals
where available, they will also get free for three months. |
|
So
when you look at this, if the customer subscribes to AT 150, they basically get
two receivers installed at no cost to them after their programming rebates. Now
again, if they subscribe to AT 100 or AT 50, then that’s a different
calculation. |
| C. Ergen |
Well, they just get a little bit less. |
| J. DeFranco |
That’s right, they get a little bit less of a credit,
but a great program. |
| C. Ergen |
But 1-2-3, that’s a cash offer. They actually buy the
equipment so you’ve really got two systems where DHP, where customers
have multiple TV sets and they want in-home service and we lease the
equipment or they can own the equipment, like in 1-2-3. |
| J. DeFranco |
That’s right. If they commit to the year programming,
they’ll get the three months free. |
| C. Ergen |
If they commit to a year programming and they have to have a
credit card? Credit card? Credit card only? |
| J. DeFranco |
If they don’t have a credit card, they can still get the
price on the hardware, they can still get their reduced price on the
hardware, they still get the free installation, they still get the second
receiver free. |
| C. Ergen |
And if they’re willing to commit to a year and have a
credit card and give your Social Security number. No? No, don’t need a
Social Security number. Okay, so credit card, commit to a year, then they
get the three months free. |
| J. DeFranco |
That’s right. |
| C. Ergen |
So you’ve kind of got ... you’re right, this was a
you ask for it, you got it. |
| J. DeFranco |
Well and a big part of it was AT 50. Now you can qualify for
1-2-3 Great TV with AT 50. It used to be AT 100. |
| C. Ergen |
So you can buy two receivers for $149, you can just sign up
for AT 50 at $22.99 a month and get three months free or not three months
free if you don’t want to commit, right? So there’s something for
everybody. You really in terms of the offers in the marketplace with cable,
you should be able to compete very, very well with cable. Most cable
systems are maybe a month free programming or something like that so
you’ve got really some advantages there and you’ve got either ...
you’ve got either equipment purchase or a rental lease model like
cable, either one of them and you should be very, very competitive. |
| J. DeFranco |
Okay a couple other quick things. Obviously with the price
change of the 301, you know that’s kind of our meat and potatoes
product, there have been some price changes as well on some of our
remanufactured products, so the 39, 4900 and so on and so forth. You can go
to the retailer website and see your contact, who you purchased your
hardware from, we’ll have the information there. In addition to that
another “you asked for it, you got it,” Charlie, and that is that
we will have a buyback program. You can look at for the details in the
Blast Fax that follows the Chat for 301s and 501s, so this is not an
amnesty program but it’s similar to that, so take a look at that. |
| C. Ergen |
What [inaudible] is that? |
| C. Ergen |
What do you mean buyback from? |
| J. DeFranco |
If a retailer has a consumer and this is outside of DHP
because it doesn’t apply to DHP. In DHP we have a process where the
retailer can get their unit cleansed, as an example, if the customer
purchased a unit or they didn’t purchase it, but they signed up for
DHP and they charged programming on their Smart Card and didn’t pay
it. |
| C. Ergen |
Right, I understand that. |
| J. DeFranco |
So if they defaulted, then the retailer can get that cleaned
off to be able to use that hardware again in the first 90 days. |
| C. Ergen |
But now you have a buyback to buy a 301 or a ... |
| J. DeFranco |
And it’s extended to 190 and then after that, when the hardware
belongs to us, obviously the hardware belongs to the company, the
retailer’s not involved. But in a cash and carry type situation, if for
some reason the customer doesn’t live up to their commitment and the
retailer goes back and picks that hardware up and there were charges on the
unit, they have a choice now, they’ll either be able to pay off those
programming charges or they’ll be able to sell the box back to us. |
| C. Ergen |
And I assume we buy it back at a discount. |
| C. Ergen |
Okay, I just wondered. |
| J. DeFranco |
Just checking. |
| C. Ergen |
We hope we’re not buying it back for ... hopefully
it’s a big discount. I don’t know. |
| J. DeFranco |
It’s, you know, it’s up to the retailers to decide
if they want to participate. We’ve done what we can do. That’s
all we can do, you know. |
|
Okay,
Charlie, we’ve got actually some questions and there was a note in here
anyway about StarBand so maybe you can elaborate a little bit. We have StarBand
on engineering hold. It’s been that way for a week and maybe you can tell
us a little about that. |
| C. Ergen |
Yeah, I’m not sure I’m totally up to speed on it, but it’s
on engineering hold, we’ve got some technical and business issues. I hope
to have those ... I think we hope to have those resolved by the end of this
week. If you have StarBand equipment, you can continue to sell it, but we just
haven’t shipped ... we have a shipping hold on the product, the new product
for now until we get some issues resolved on a technical and business side, so
hopefully we’ll have an answer for you. As soon as we have an answer for
you ... I’m going to guess that by Monday of next week we’ll certainly
have answers on that. So hopefully we’ll get that back on track and going.
But today we’re just not able to ship the product at this point. |
| J. DeFranco |
Okay, Charlie, let’s go ahead and take some questions. We’ve
got the number on the screen, if you’d like to call in. I’ve got a
couple of e-mails that came in. This is one I know we’ve answered before
but it is a mainstream very important question, so, Mary, this one is for you. |
|
This
is from Sierra Communications and she says, “Since the customer credit card
qualifies to receive three free months of programming, why can’t this be
done when building the account? By doing so this leaves the dealer ... by not
doing so, this leaves the dealer in a vulnerable position.” In other words
what she’s saying is we don’t know when we’re talking to the
customer whether their credit card will be valid, right, and maybe you can
address that. |
| Mary |
Jim, what we had was a system limitation. Unfortunately, we
wanted to be able to offer the hardware portion of this promotion so that
you could offer |
|
your
customer two receivers for the price of one. And our system is set up either you
have to put the credit card in all the time or none of the time and so we split
it so that you can always offer the hardware promotion but if the customer wants
to have the programming credits, they need to make sure that their credit card
is valid and nothing will stop you if you have, if you take credit cards in your
business from running that credit card for a dollar and making sure it’s
valid the day of the activation. |
| C. Ergen |
So that’s what they have to do? They have to run their
own ... the way to do it is to run your own credit card? |
| Mary |
It’s only being run for a dollar, Charlie, so most
people know if their credit card’s valid for a dollar. |
| C. Ergen |
Understand. But that’s what they have to do, check the
ID, check the customer and make sure it’s the same person, run it for
a dollar, then you’re safe or should be safe unless the guy only has
$2 of credit. |
| J. DeFranco |
This next one is from DishWorks from Darrell, Darrell says
and this is another one relating to promotions or the processing of
promotions. It says when there is a problem with the retailer website claim
forms (and this has to do with credit scoring) could you please post a note
on the site that says so. So I think we certainly have learned a lot over
the course since we started credit scoring. Maybe you can address what we
do and how they can see that there. |
| Mary |
Okay, typically what happens is you will see ... we’ve
had some unprecedented outages with our credit card companies which is
unbelievable because they are typically up 99.9% of the time. And we did
have a couple of outages that we were not ready for. We are ready now. We
understand that they can go down and you will start getting messages that
say “try again” and when you get the message that says “try
again” that’s when you know that our system is down. |
|
At this point I’ve met with the companies and they have
assured me that they are over the hump in terms of these outages. And while
we’re prepared now, we don’t anticipate further outages at this
point. |
| C. Ergen |
So we’re actually doing what the retailer asked, right,
which is try again, so you’ll know we’re down. Okay. |
| J. DeFranco |
Okay, we’ve got Jim out there. Jim, are you there? |
| J. DeFranco |
Welcome to the Charlie Chat. What can we answer for you today? |
| Jim |
I have a question. I’m a new retailer, I’ve been in
business for just a couple of weeks. I ordered up 20 systems and also ten
stand-alone systems to save on shipping and after the 25th with my left
over inventory, I obviously will have, being new I don’t have a
customer base, I stand to lose about anywhere from $500 to $1,000 on the
price reduction. Is there anything that Dish Network can do for me there or
what’s the plan? |
| J. DeFranco |
Jim, no, we don’t ... the reason we have a delay between
the time we lower the price to the retailer and the time that we lower the
price to the marketplace, the suggested retail price, and two weeks, you
know actually I’m sorry you got yourself in that situation. I
don’t know who you purchased your hardware from. Certainly you can
contact them but, no, we don’t normally do that because in our pricing
policies and the way we administer the things, we make those price changes
in such a way that we wouldn’t have to do price protection and that
you should be able to sell through that product expeditiously before the
... you might want to have a sale, you know, have a little sale and create
some excitement, some enthusiasm for the folks in your area and then in the
future I guess I would recommend that while I think the pallet quantities
you save $4 if you’re purchasing from Ecosphere, you know really we
suggest that you buy hardware as you need it, a week to ten days’
worth of inventory should be sufficient. |
| C. Ergen |
I think the big thing is that we stock a lot of inventory
here and I think for the last, boy, last couple of years, I can’t
remember being out of our basic product and we just recommend that
retailers stock what they need for a week or ten days and not get in a
situation and that’s just kind of ... We spend a lot of money to stock
the inventory here so you don’t have to stock it in your particular
location. But it does happen occasionally. I understand what this
retailer’s saying, it does happen occasionally but we’ve got to
look at the broader basis that we have and try to do something on a fair
basis. Okay? |
| J. DeFranco |
Right and of course price changes don’t happen too often either. |
| C. Ergen |
That’s true and not likely to happen now for a long time. |
| J. DeFranco |
Okay, this next question comes from Frank at North Country
Satellite. This is a good one. He says, “When a customer calls Dish
Network with a problem of any kind, why are the CSRs telling them that they
will send out a service tech at X amount per hour? They must have the name
of the dealer that sold the system on record at Dish Network and why
can’t they forward that compliant to the installing dealer?" |
|
I
know what you’re thinking - why didn’t the customer call the dealer
himself. And after 20 plus years in business we all know that some customers are
.... he says they’re not that bright but I don’t think I’d say
that, but in any event and they’re going to call the number they first see
which is the 800 number. This is a great question, Charlie. I mean I spent two
full days at our customer service center this past week and I actually did
experience, I mean I have to say on behalf of the agents as well as the
retailers, the majority of the calls, the lion’s share of the calls were
all very good. In other words, the calls I was listening to were outbound calls.
We check with the consumers on a five to seven day timeframe to make sure that
they understand the product. |
| C. Ergen |
Once they’ve got a new system, yeah. |
| J. DeFranco |
Yeah, new activation, and I mean many, many, many calls the
customer, they were happy with the install, they were happy with everything
that |
|
happened,
they understood how to use it, the retailer showed them, they were comfortable
with the product. Then there’s that odd call that you get where it took 40
minutes because the customer wasn’t satisfied and the installer ran out of
the house after they got it working and didn’t show them how to use it,
they actually ... their neighbor had to show them how to use it and the
installation wasn’t done to specifications. |
|
So
I think what’s important here, first of all to address Frank’s
question is believe it or not, the CSRs don’t easily have access to who the
retailer was that initially installed that system. That’s number one.
Number two is if they’re able to go through multiple systems to get to it
and they only do that in a severe case where the customer really has got serious
problems, even then the phone number isn’t there. |
|
So
the best thing you can do for your customers is to ... we talked about it on
shows previous, Charlie, get a magnet, a refrigerator magnet, a phone stickers,
a sticker to put on the side of the receiver that has your information on it and
reinforce ... first of all, do everything right upfront, right? install it
properly, make sure it works, show the customer how to use it, keep track of who
you’re ... the type of job that your installers are doing, right? You do
some welcome calls to the customers after 24, 48 hours, make sure that
they’re happy with the install, that they understand how to use it. Now we
know that that doesn’t solve everything, right, and occasionally a customer
will have a problem, but it is not our intent to be sending ... |
| C. Ergen |
We can’t do it as cheap as you can. We would lose money
sending somebody out on a service call for $59, so we would prefer not to,
but we certainly want the customer to be taken care of in any circumstance.
A DHP customer obviously we’re obligated on in-home service for ...
that’s a little different customer but the main thing and we talked
about it many, many times is to make sure that you leave with the customer
anything from cards to magnets to labels on the set top box, they know
where to call if they’ve got a problem. Which is not us. |
| J. DeFranco |
Alright, so this next one is from James from Reynold, looks
like Indiana, James Staples. “Love your products. Has there been any
solutions to Dish Player?” So the software on Dish Player. That’s the
question. |
| C. Ergen |
I can speak to that one a little bit because I have a Dish
Player at home and trying to watch all the NCAA Basketball games and record
them all and ... the software has got some bugs in it from Microsoft.
Microsoft has indicated they’re going to fix the problems.
They’ve been indicating that for a long, long time. Very disappointed,
I’m personally very disappointed in Microsoft and their ability to
solve some of the problems. I probably at least once a day I’m having
to unplug my unit and plug it back in or reset it to get the software back
up and then sometimes it’ll go out if you watch it a lot, it’ll
go out while you’re watching it and you’ve got to reset it and
all to get it to work, so it’s very disappointing. I don’t know
what the ... I know we have software in test from Microsoft. |
| Male |
Right, the good news is there is some fresh software in test
and it is under evaluation right now. So hopefully with positive results
from that, we’ll be able to get that released and have some of ...
many of the issues that are currently out there resolved. |
| C. Ergen |
I think the key is release it as soon as we get through test
and make sure that it doesn’t create other problems which has been the
typical problem. They’ve solved some bugs and then other ones are
generated. |
|
So we’ve got it in test. A lot of it was caused by all
the local channels that we did on January 1st. That’s really where the
problems cropped up, so we’ve been January, February, half of March
now where they haven’t fixed the problems. |
|
As
soon as we get the testing, there’s no problems in the testing, then we can
release it. If there’s problems in the testing, which are likely, we have
to go back to them again to fix those problems and then retest it, so I
don’t ... you don’t have even an estimated time when we’re going
to ...? |
| Male |
No, I don’t have an estimate right now. It went into
test recently so it has to go through that entire process and it’s a
painstaking process because like Charlie mentioned, you’ve got to make
sure that while you’re fixing something you don’t break something
as well. |
| C. Ergen |
We don’t have old codes now because it doesn’t do
all the new local channels that we have. Normally in the past when we were
having serious problems, we just download an ML code. In this case we
can’t do that because this won’t work with all the local channels
we added in January. |
|
So
I guess a couple of things. One is typically you can make your Dish Player work
even though it’s a hassle and second, we will at some point in time and
hopefully it’s in the next week or two, have software that actually fixes
the problem. At least Microsoft is committed to that. We don’t write the
code, we don’t have the source code, so we can’t fix it ourself. We
have to have them do it. They contractually are supposed to do it. You know, we
are in litigation with them on a number of issues with Dish Player. We’re
doing all we can but that’s very frustrating because it’s not the
level of customer service that we like to have. |
| J. DeFranco |
Okay, this next question comes from Mark Williams out of
Cleveland, Tennessee. And he’s asking (I don’t know how long
Mark’s been a retailer) but he says, “Why is it that when a
customer has an equipment problem, namely a receiver problem and swaps it
that we get charged back?" |
|
Obviously
that’s not the way the system works. Mary, do you want to ... there is a
way to do an exchange properly and it doesn’t cause that problem, but maybe
you can address that real quick. |
| C. Ergen |
I think the answer is if you follow the rules, you don’t
get charged back and if you do get charged back and you follow the rules,
then we will correct our mistake. |
| J. DeFranco |
That’s right. |
| C. Ergen |
You could, if you don’t follow the rules, you could get
charged back, but this is about the tenth time on Charlie Chats we’ve
gone over it and we’ll go over it another time because sometimes we
get new retailers that don’t understand the rules. |
| Mary |
Right and what I don’t understand is whether this
retailer’s buying from a distributor or not. He doesn’t indicate
there, does he? |
| J. DeFranco |
He didn’t say. |
| C. Ergen |
We’ll call the retailer after the show so we make sure ... |
| Mary |
But if you are buying from a distributor, it’s
imperative that if you exchange directly with Dish Network that you use
those as swap-outs on future accounts. Those units are not tied to you
because you’re not a commissionable retailer directly through us, so
if you’re taking a receiver that you get from service and putting it
on an account, that is going ... you are causing your own charge-backs. So
please, if you’re confused about that, contact your distributor and
talk to them about it. |
| C. Ergen |
Well we’ll call the ... |
| J. DeFranco |
I’ve got Mark’s dealer number, so we can contact ... |
| C. Ergen |
He’s from Tennessee, so we’ve got to take care of
him. He’s from Cleveland, so we’ll take care of him.
|
| J. DeFranco |
We’ll go especially out of our way to take care of ... |
| C. Ergen |
So we’ll call Mark after the show to make sure we got it
right, or if we made a mistake, we’ll make sure we correct it. |
| Mary |
If you’re a direct dealer, then the only thing I need to
tell you is make sure you don’t shut off the account because if your
customer shuts off the account because they’re concerned about charges
for a day or so, that will cause a charge-back as well. So please encourage
your customers to leave their account active and then you do the swap-out
when the new receiver’s put on the account. |
| J. DeFranco |
Okay and obviously if the customer was under some type of
service agreement, the CSR wouldn’t allow him to shut if off
anyway. |
| J. DeFranco |
We’ve got another caller. Carl, are you there? |
| J. DeFranco |
Welcome to the Charlie Chat, what can we answer for you today? |
| Carl |
Yes, I’ve got a question about the 501 upgrade. The
current customers that use a different retailer to become Dish Network
customers with the 301s and then they want the 501 upgrade. If they chose
to use a different retailer, the way the business rules are set up, they
cannot do so unless they go directly through Dish Network and I was
wondering why. |
| C. Ergen |
Good question. Mary’s going to have that one too. I
think I understand the question. A customer buys a 301 from dealer X, then
he buys a 501 from retailer Y or tries to. |
| Mary |
He tries to. And the reason we prohibited that is because it
will cause a charge-back. If you think about it, the first retailer has his
equipment on the account, customer may or may not have a commitment but
then when another retailer’s equipment goes on, then it’s not
exchange eligible and it will cause that first retailer to get a
charge-back and the second retailer will get an additional outlet payment.
That is a problem with this and so please do not try to upgrade customers
if they are not your customers to begin with. You will cause, you will not
get paid on the 501 upgrade and you will cause the first retailer to get
charged back. |
| C. Ergen |
So it’s a system limitation and it’s to protect you
guys is the reason we have it. Okay. |
| J. DeFranco |
This question is from Dennis and this has to do with
programming and it says “CSRs are telling us” (and I don’t
know if this in retail services or at our customer service centers),
“are telling us that if you do not qualify for PBS |
|
in your area, that waiver requests, either electronically
or written, from PBS stations in your area will be allowed. This means the
individual’s not give the right watch PBS. I think there’s some
confusion here. It probably has to do with ... |
| C. Ergen |
Well where we have the 36 stations where we have local/local, we only
offer ... before we had local/local, we offered PBS nationwide, PBS all over.
Now that we have 36 cities local/local and with the must-carry law, because we
carry PBS now on our main satellite in the local area, so we carry your local
PBS in those 36 markets, we only authorize the local PBS. If you live in a
market outside of where we do local/locals, then I believe PBS is giving waivers
for the nation channel, but you do have to get a waiver. That’s the only
way it works. So if you live in Little Rock, Arkansas, today you would be able
to get nationwide PBS, I think. And if you live in Denver, Colorado, you only
get the Denver PBS. There’s probably some exceptions to that, but generally
that’s how it works. |
| J. DeFranco |
This next one is from Satellites by Bob and he says “why do I have
order separate Dish 500s for the Dish 500 upgrades? I always have several
antennas laying around for various reasons. After all Charlie says we can mix
and match but I’m not paid unless I include the UPC label with my claim
submission.” |
|
And
the reason is pretty simple, and that is we want to make sure the customer
number one is upgraded to a Dish 500. That’s one way that we verify that.
You still can use your Dish 500 antennas for a new activation, so in other words
there’s no reason why you can’t buy a stand alone at the new pricing
for $99, use your Dish now, and be your twin, and put them in for a new
customer. It’s the same thing as if you bought the system at $149. But when
it comes to Dish 500 upgrades, we do want you to buy the upgrade kits because we
want to make sure that those are done properly and that’s one of the
mechanisms for ... |
| C. Ergen |
The simple answer is you can upgrade, use the Dish 500
upgrade kit to ensure you get paid. If you’re getting a new install,
you can mix and match. Right? |
| C. Ergen |
New install, mix and match. |
| J. DeFranco |
That’s right. Okay, got another caller. Gabriel, are you
there? |
| Gabriel |
Hi, how you doing today? |
| J. DeFranco |
Good. Welcome to the Chat. What can we answer for you? |
| Gabriel |
EchoStar VII is in orbit. Should we see any change in
technology in Puerto Rico in order to be able to use smaller dish? |
| C. Ergen |
That’s a possibility. EchoStar VII again should be
operational by the first of May and it will double the power at the 110
location, so in theory, again we don’t have the patterns yet and you
don’t know until you move your satellite around, you probably will see
an increase level signal from the ... excuse me, we’re going to the
119 location ... We’re going to the 119 degree location, so Echo VII
is the 119 degree location. I think we’re already at high power there,
I don’t know what the highest power is there, so I don’t know
what it does for Puerto Rico. We’re in the patterns today ... Puerto
Rico is not what it was designed for. In Alaska and Hawaii, it was designed
for, not Puerto Rico. Probably, because it’s a newer satellite and has
some increased power, probably on the margin has better signal. |
|
EchoStar
VII which launches this summer at the 110 location will actually double the
power to 110 locations. Again, it’s not designed for Puerto Rico
specifically, but I would imagine that that will increase our service there in
Puerto Rico. We don’t like to talk about it too much, because we’re
not really actively in Puerto Rico because we don’t want people complaining
about the signal in Puerto Rico because we just haven’t designed anything
for that. |
|
Ultimately
as we get these satellite together, particularly with the merger, as we move the
satellites and the programming around, I think you could have a logical
extension of that, that Puerto Rico will be an area that we will be able to
service much, much better than we do today. Gosh, we’ll go back and |
|
look at
what it looks like in Puerto Rico. My gut feel is that Echo VII will not make a
big difference in Puerto Rico. Echo VIII probably will make a difference in
Puerto Rico as it launches this summer. |
| J. DeFranco |
Okay, Echo VIII this summer. Another one ... this is another good
question, Mary. It seems like we’ve got a lot of questions. This one ...
today, for some reason, we have a lot of questions about how payments are made
and so on and so forth. Got two of them here. One is why can’t retail
services set up a way for e-mails to be sent to us about customers that are
about to disconnect so that we know in advance if we’re going to have a
charge back and maybe we can something to service that customer and make sure
they stay on the service. |
| Mary |
Let’s see now. We’ve heard this many times and this is something we
are looking at and we are building in a commission system. That’s truly a
system limitation. We do not have the ability at this point because the way our
commission system works, is it takes the data from our billing system and from
Oracle, our accounting system, puts it all together and then tells us who to pay
and who to charge back. Our billing system does not say who the retailer of
record is so we don’t have access to that data usually and it takes us a
week to get the commission run out, so it would take even longer probably to
give you a disconnect report and then it’s only 15 days that they’re
in soft disconnect, so by the time you got to most of these customers, most of
them would have already re-connected and paid their bills because most people
that go into soft disconnect do re-connect right away. |
| C. Ergen |
And we do ... well for a lot of things. One, we probably have tens of
thousands everyday that get late, for whatever reason, on their bill; 99% of
those people pay their bill before they’re actually disconnected. To go
through that many people and contact them would be not an economic answer to do
it, number one. And number two is we do an awful lot of things to save the
customer at our expense that you don’t have to worry about. And third, most
of our programs where you have a commitment or credit card or credit check, then
you’re picking the right customers. Because you’re at the
customer’s house, you see the customer, you see his house, you see the
way... you see what’s going on. You have the best choice of decision |
|
making
process up front on whether you sell a customer in the first place. And credit
card auto pay ... get them on credit card auto pay, and you’re not going to
have a lot of disconnects. You have a lot of things at your disposal. We have a
system limitation. It’s not likely any time in the near term, we’ve
looked at a lot of ways and put a lot of effort into being able to do this. It
is not likely that we’re going to be able to give you information on
somebody who’s going to go into disconnect mode prior to it happening. |
| J. DeFranco |
Okay, Charlie, let’s take this one question here and then
we’re going to take one more call. This again is about payment, it says,
“If a customer chooses to purchase a second receiver from a retailer other
than the original retailer, who receives the activation payment on the second
receiver and will the dealer who sold the primary receiver... is it the guy who
sold the primary, or the one who sold the secondary? |
|
I’ll
answer, and we’ll save a little time. It’s the person who sold the
secondary receiver because that receiver is on record with that retailer. They
would get the AO payment for $40. |
| C. Ergen |
The primary, the person who sold the primary receiver would get the ... |
| J. DeFranco |
No. If the second receiver is added, the customer starts with
one receiver, for some reason ... |
| J. DeFranco |
... from dealer X, then dealer X gets taken care of on those payments,
and dealer X would get the residual. But dealer Y for some reason the customer
calls dealer Y, maybe dealer X didn’t provide good service, maybe dealer X
has moved or something and adds a receiver from dealer Y, dealer Y would get the
AO fee of $40 and it would not affect the initial payments that were made to
dealer X or the residual. |
|
So
the system works good. The fact that we’re getting these kind of questions,
we must have some new retailers and I think maybe what we should do on the
retailer website have, or maybe we already have, some basics. |
| C. Ergen |
You confused me. The other question earlier was about an upgrade to a 501 ... |
| J. DeFranco |
That’s good, because ... an exchange. That’s different. |
| Mary |
If they just add the 501, he would have gotten ... |
| C. Ergen |
If you just add a 501 as opposed to taking the main unit out,
as long as the primary unit stays in there, you’re fine as a retailer.
As long as the primary unit stays in there. |
| Mary |
That’s not a 501 upgrade, though, Charlie. That’s an exchange. |
| C. Ergen |
He takes the primary receiver out, then it’s a problem. I understand. |
| J. DeFranco |
Alright. Okay, so, Charlie ... |
| C. Ergen |
Did you say we had one more call? |
| J. DeFranco |
Actually, Charlie, he didn’t have patience, so he’s not there right now. |
| C. Ergen |
Well, you’ve got to be patient with Charlie Chat. |
| J. DeFranco |
Or maybe we answered his question. But, any closing comments? |
| C. Ergen |
No, I think... well, we have a Consumer Chat coming up on April 8.
We’ll have our next Retail Chat is April 9. And then after that we’ll
be off to Team Summit and again I think we’ve given you all the tools to be
able to be successful in the marketplace. We’re certainly interested in
feedback and continue to get feedback on what works and what doesn’t work
and hopefully you’re all planning on being at Team Summit so we can really
make a difference. There’s a lot going on and we continue to try to build
the system. |
| J. DeFranco |
Okay, so thanks for joining us and we’ll see you on the
next Chat or at Team Summit. |