EchoStar family tier not so retailer friendly

Fine-print clause conceals hidden charges

By STEVEN ZEITCHIK

NEW YORK -- When EchoStar announced its family tier two weeks ago, the satcaster pitched it as more customer-friendly than rival plans from Time Warner and Comcast, with more channels and a lower pricetag.

But just how friendly is it?

A fine-print clause in EchoStar's agreement with retailers makes the package decidedly unappealing to sell. The provision deducts $100 from the $300 retailers are typically paid for selling an EchoStar system to a new subscriber -- making it less likely that retailers would push the plan over other packages.

One retailer described the clause as evidence of the company's lack of serious interest in family packages. "They didn't want to penalize customers, so they penalized retailers," said the retailer.

Comcast, Time Warner and EchoStar have all launched family tiers in the past few months. But some have criticized the packages as aimed more at deflecting FCC pressure to sell programming a la carte -- and protecting expanded-basic tiers -- than at attracting a wide audience.

At a recent congressional hearing, EchoStar CEO Charles Ergen announced the package, which concentrates mainly on children's, news and educational programming, and said it would make for a better option than a la carte.

When it made the announcement, EchoStar also touted its increased number of channels (40) and lower price ($24.99) relative to other plans.

An EchoStar spokesman confirmed that retailers would get paid less for selling the family tier but said the company was making it attractive to sell by lowering the price, ensuring that more customers would want it. A retailer also collects residuals when selling a new package.

EchoStar also is taking out full-page newspaper ads, showing it's getting behind the service, the spokesman said.