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Dish and DirecTV Join the 2018 Rate Hike Parade

Phillip Dampier December 28, 2017 Competition, Consumer News, DirecTV, Dish Network 1 Comment

Satellite dish customers relying on Dish Networks or DirecTV for cable programming will need to open their wallets wider in 2018 to cover rate increases at both providers.

Dish

“On behalf of all of us at Dish, thank you for your business. You have asked us to be honest and upfront with changes to your account, and that is why we are writing you,” the satellite company wrote on its website.

Effective Jan. 16, 2018, broad rate hikes of about $3 a month for cable networks and $2 a month for local channels will take effect. Dish’s “Smart Pack” will increase by 7% to $44.99 a month, America’s Top 200 rises 6% to $89.99 and America’s Everything gets a 3.4% boost to $149.99 a month. Customers on a promotion will not see the rate hike until their offer expires.

The biggest rate increase by percentage applies to local stations, where most will see a 20% rate hike from $10 to $12 a month.

Dish has published its 2018 rate card on its website, detailing the price hikes.

Package Core Programming Local Channels Total
Welcome Pack $22.99 Included $22.99
Smart Pack $32.99 $12.00 $44.99
DISH America $47.99 $12.00 $59.99
America’s Top 120 $62.99 $12.00 $74.99
America’s Top 120 Plus $67.99 $12.00 $79.99
America’s Top 200 $77.99 $12.00 $89.99
America’s Top 250 $87.99 $12.00 $99.99
America’s Everything Pack $137.99 $12.00 $149.99

Spanish/Latino Packages

Package Core Programming Local Channels Total
DishLATINO Basico $34.99 Included $34.99
DishLATINO Clásico $37.99 $12.00 $49.99
DishLATINO Plus $44.99 $12.00 $56.99
DishLATINO Dos $62.99 $12.00 $74.99
DishLATINO Max $74.99 $12.00 $86.99

Channel Packs

Package Price
Locals Pack $12.00
National Action Pack $12.00
Regional Action Pack $12.00
News Pack $10.00
Kids Pack $10.00
Latino Bonus $10.00
Variety Pack $6.00
Heartland Pack $6.00
SiriusXM Pack $6.00
Outdoor Pack $4.00

DirecTV

DirecTV rates will rise effective Jan. 21, 2018 according to its website. The increase is blamed on programming costs. Customers on a promotion will not see the rate increase until that promotion expires. But AT&T, which owns DirecTV, also warns customers if they change their current base package, their promotion will end immediately and the new, higher rates apply.

DIRECTV Packages Monthly Price Increase
Minimum Service
FAMILY
$0
SELECT
SELECT CLASSIC
SELECT CHOICE
$2
ENTERTAINMENT
ENTERTAINMENT CLASSIC
$3
CHOICE
TOTAL CHOICE
$4
TOTAL CHOICE LIMITED $4.50
TOTAL CHOICE Mobile
CHOICE XTRA CLASSIC
$5
PREFERRED XTRA
XTRA
$7
ULTIMATE
PREMIER
$8
DIRECTV Español Monthly Price Increase
ChineseDirect Plus $0
BASIC CHOICE
BASIC
$1
MAS LATINO
OPTIMO MAS
PREFERRED CHOICE
MAS MEXICO
BASICO
OPCION ESPECIAL
$2
FAMILIAR
OPCION EXTRA ESPECIAL
$3
OPCION ULTRA ESPECIAL $4
MAS ULTRA
MAS ULTRA ORIGINAL
FAMILIAR ULTRA
$5
LO MAXIMO
OPCION PREMIER
 $8

Regional Sports Network and Outdoor Channel pricing adjustments for DIRECTV

Service Monthly price increase
Regional Sports Network Tier 1 $0.00
Regional Sports Network Tier 2 $0.70
Regional Sports Network Tier 3 $0.81
Regional Sports Network Tier 4 $0.20
Regional Sports Network Tier 5 $1.00
Outdoor Channel $1.49

The Great Telecom Merger Carousel: Altice <-> Sprint <-> T-Mobile <-> Charter

A last-ditch effort last weekend by executives of SoftBank and Deutsche Telekom to overcome their differences in merging Sprint with T-Mobile USA ended in failure, killing Wall Street’s hopes combining the two scrappiest wireless carriers would end a bruising price war that had heated up competition and hurt profits at all four of America’s leading wireless companies.

Now Wall Street, hungry for a consolidation deal, is strategizing what will come next.

Sprint/T-Mobile Merger

In the end, SoftBank’s chairman, Masayoshi Son, simply did not want to give up control of Sprint to Deutsche Telekom, especially considering Sprint’s vast wireless spectrum holdings suitable for future 5G wireless services.

The failure caused Sprint Corp. shares and bonds to plummet, and spooked investors are worried Sprint’s decade-long inability to earn a profit won’t end anytime soon. Sprint’s 2010 Network Vision Plan, which promised better coverage and network performance, also helped to load the company with debt, nearly half of which Sprint has to pay back over the next four years before it becomes due. Sprint’s perpetual upgrades have not tremendously improved its network coverage or performance, and its poor performance ratings have caused many customers to look elsewhere for wireless service.

Investors are also concerned Sprint will struggle to pay its current debts at the same time it faces new ones from investments in next generation 5G wireless technology. Scared shareholders have been comforted this morning by both Son and Sprint CEO Marcelo Claure in an all-out damage control campaign.

Son has promised the now-orphaned Sprint will benefit from an increased stake in the company by SoftBank — a signal to investors SoftBank is tying itself closer to Sprint. Son has also promised additional investments to launch yet another wave of network upgrades for Sprint’s fourth place network. But nothing is expected to change very quickly for customers, who may be in for a rough ride for the immediate future. Son has already said his commitment to raise Sprint’s capital expenditures from the current $3.5-4 billion to $5-6 billion annually will not begin this year. Analysts claim Sprint needs at least $5-6 billion annually to invest in network improvements if it ever hopes to catch up to T-Mobile, AT&T, and Verizon Wireless.

Masayoshi Son, chairman of SoftBank Group

“Even if the next three-four years will be a tough battle, five to 10 years later it will be clear that this is a strategically invaluable business,’’ Son said, lamenting losing control of that business in a deal with T-Mobile was simply impossible. “There was just a line we couldn’t cross, and that’s how we arrived at the conclusion.”

During a call with analysts on Monday, Sprint’s chief financial officer Tarek Robbiati acknowledged investors’ disappointment.

Investors were hoping for an end to deep discounting and perks given to attract new business. T-Mobile’s giveaways and discounting have reduced the company’s profitability. Sprint’s latest promotions, including giving away service for up to a year, were seen by analysts as desperate.

Son’s own vision plan doesn’t dwell on the short-term, mapping out SoftBank’s progress over the next 300 years. But for now, Son is concerned with supporting the investments already made in the $100 billion Vision Fund Son has built with Saudi Arabia’s oil wealth-fueled Public Investment Fund. Its goal is to lead in the field of next generation wireless communications networks. Sprint is expected to be a springboard for those investments in the United States, supported by the wireless company’s huge 2.5GHz spectrum holdings, which may be perfect for 5G wireless networks.

But Son’s own failures are also responsible for Sprint’s current plight. Son attempted to cover his losses in Sprint by pursuing a merger with T-Mobile in 2014, but the merger fell apart when it became clear the Obama Administration’s regulators were unlikely to approve the deal. After that deal fell apart, Son has allowed T-Mobile to overtake Sprint’s third place position in the wireless market. While T-Mobile grew from 53 million customers to 70.7 million today, Sprint lost one million customers, dropping to fourth place with around 54 million current customers.

Son’s answer to the new competition was to change top management. Incoming Sprint CEO Marcelo Claure promptly launched a massive cost-cutting program and layoffs, and upgrade-oriented investments in Sprint’s network stagnated, causing speeds and performance to decline.

Claure tweetstormed damage control messages about the merger’s collapse, switching from promoting the merger’s benefits to claims of relief the merger collapsed:

  • “Jointly stopping merger talks was right move.”
  • Sprint is a vital part of a larger SoftBank strategy involving the Vision Fund, Arm, OneWeb and other strategic investments.”
  • “Excited about Sprint’s future as a standalone. I’m confident this is right decision for our shareholders, customers & employees.”
  • “Sprint added over 1 million customers last year – we have gone from losing to winning.”
  • “Last quarter we delivered an estimated 22% of industry postpaid phone gross additions, our highest share ever.”
  • “Sprint network performance is at best ever levels – 33% improvement in nationwide data speeds year over year.”
  • “We are planning significant investments to the Sprint network this year and the years to come.”
  • “In the last 3 years we’ve reduced our costs by over $5 billion.”
  • “Sprint’s results are the best we’ve achieved in a decade and we will continue getting better every day.”

In Saturday’s joint announcement, Claure said that “while we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination. However, we have agreed that it is best to move forward on our own. We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth.”

“They need to spend (more) money on the network,” said William Ho, an analyst at 556 Ventures LLC.

CNBC reports Sprint’s end of its T-Mobile merger deal has hammered the company’s stock. What does Sprint do now? (1:30)

Sprint/Altice Partnership

Sprint executives hurried out word on ‘Damage Control’ Monday that Altice USA would partner with Sprint to resell wireless service under the Altice brand. In return for the partnership, Sprint will be able to use Altice’s fiber network in Cablevision’s service area in New York, New Jersey, and Connecticut for its cell towers and future 5G small cells. The deal closely aligns to Comcast and Charter’s deal with Verizon allowing those cable operators to create their own cellular brands powered by Verizon Wireless’ network.

An analyst at Cowen & Co., suspected the Altice deal may be a trial to test the waters with Sprint before Altice commits to a future merger between the two companies. Altice is hungry for expansion, currently owning Cablevision and Suddenlink cable operators in the U.S. But Altice has a very small footprint in the U.S., leading some analysts to believe a more lucrative merger might be possible elsewhere.

Sprint/Charter Merger

Charter Communications Logo. (PRNewsFoto/Charter Communications, Inc.)

Charter Communications stock was up more than 7% in early Monday morning trading as a result of speculation SoftBank and Charter Communications were restarting merger talks after a deal with T-Mobile collapsed.

CNBC reported that Mr. Son was willing to resume talks with Charter executives about a merger between the cable operator and Sprint. Charter executives have shown little interest in the deal, still distracted trying to merge their acquisitions Time Warner Cable and Bright House Networks into Charter’s current operation. Charter’s entry into wireless has been more tentative, following Comcast with a partnership with Verizon Wireless to resell that considerably stronger network under the Charter brand beginning sometime in 2018.

According to CNBC, John Malone’s Liberty Media, which owns a 27% stake in Charter, is now in favor of a deal, while Charter’s top executives are still opposed.

CNBC reports Charter and Sprint may soon be talking again about a merger between the two. (6:33)

Dish Networks <-> T-Mobile USA

Wall Street’s merger-focused analysts are hungry for a deal now that the Sprint/T-Mobile merger has collapsed. Pivotal Research Group is predicting good things are possible for shareholders of Dish Network, and upgraded the stock to a “buy” recommendation this morning.

Jeff Wlodarczak, Pivotal’s CEO and senior media analyst, theorizes that Sprint’s merger collapse could be good news for Dish, sitting on a large amount of unused wireless spectrum suitable for 5G wireless networks. Those licenses, estimated to be worth $10 billion, are likely to rise in value as wireless companies look for suitable spectrum to deploy next generation 5G networks.

Multichannel News quotes Wlodarczak’s note to investors:

“In our opinion, post the T-Mobile-Sprint deal failure there is a reasonable chance that T-Mobile could make a play for Dish or Dish spectrum as it would immediately vault the most disruptive U.S. wireless player into the leading U.S. spectrum position (w/ substantially more spectrum than underpins Verizon’s “best in class” network),” Wlodarczak wrote. “This possible move could force Verizon to counter-bid for Dish spectrum (or possibly the entire company) as Dish spectrum is ideally suited for Verizon and to keep it out of T-Mobile’s hands.”

AT&T/DirecTV Buyout of Dish Network

Wlodarczak has also advised clients he believes the deregulation-friendly Trump Administration would not block the creation of a satellite TV monopoly, meaning AT&T should consider pairing its DirecTV service with an acquisition of Dish Networks’ satellite TV business, even if it forgoes Dish’s valuable wireless spectrum.

“AT&T, post their Time Warner deal, could (and frankly should) be interested in purchasing Dish’s core DBS business taking advantage of a potentially more laissez faire regulatory climate/emergence of V-MVPD’s, to significantly bolster their DirecTV business (and help to justify the original questionable DirecTV deal) by creating a SatTV monopoly in ~10-15M US households, increased programming scale and massive synergies at a likely very attractive price.”

Such a transaction would likely resemble the regulatory approval granted to merge XM Satellite Radio and Sirius Satellite Radio into SiriusXM Satellite Radio in 2008. Despite the merger, just months after its approval, the combined company neared bankruptcy until it was bailed out with a $530 million loan from John Malone’s Liberty Media in February 2009. Liberty Media maintains an active interest in the satellite radio company to this day.

Contract Dispute Yanks Important TV Channel Off Dish in Puerto Rico, Virgin Islands

Phillip Dampier October 2, 2017 Consumer News, Dish Network, Public Policy & Gov't No Comments

As Puerto Rico and the U.S. Virgin Islands enter another week mostly in darkness, a TV station owner is accused of putting its financial well-being ahead of storm victims getting access to the latest news and developments after ordering its One Caribbean TV channel off the lineup of Dish Networks in a contract dispute.

Lilly Broadcasting pulled the station off the satellite service over the weekend in a move slammed by Dish as a cynical ploy.

Lilly has “turn[ed] its back on public interest obligations during [a] humanitarian crisis [and is using a] catastrophe to create ‘deal leverage,’” Dish Network said in a statement. “[Lilly] is demanding from Dish and, by extension, its customers unreasonable rate increases higher than the current Dish rate. Lilly has also refused Dish’s offer to match the rates paid by other pay-TV channels.”

Dish called Lilly’s move an attempt to “further blind the citizens of Puerto Rico and the U.S. Virgin Islands at this time, showing an unbelievable lack of compassion” and added it was a “prime example of why Washington needs to stand up for consumers and end local channel blackouts.”

Exactly how many viewers One Caribbean TV still has in either U.S. territory is unknown. Power is almost universally unavailable and many satellite dishes were turned into flying projectiles in hurricane force winds. But the optics of pulling a station delivering frequent hurricane recovery updates off the lineup at such a critical time was seen as bad publicity and Lilly quickly relented after the office of FCC chairman Ajit Pai got involved.

“Chairman Pai’s office was in touch with both Lilly Broadcasting and Dish yesterday (Oct. 1) and expressed its concern about the impact of this dispute on the people of Puerto Rico and the U.S. Virgin Islands,” an FCC spokesman told Multichannel News. ” We are pleased that the parties agreed to restore carriage of One Caribbean Television last night following these phone calls.”

Satellite Business News reported Lilly Broadcasting Chief Operating Officer John Christianson authorized restoring service in the storm areas.

“We have told Dish Network that they can continue to carry One Caribbean Television in Puerto Rico and the [U.S. Virgin Islands], to help those that can still see the networks keep informed as to what is happening in their region.”

Dish Networks Handing Out Free HD Antennas Again

Phillip Dampier August 17, 2017 Consumer News, Dish Network 1 Comment

Dish Network satellite customers in Providence, R.I. are being offered free over-the-air digital antennas in preparation for another retransmission consent dispute with the area’s local ABC station.

Citadel Communications-owned WLNE-TV (6) is warning its contract to allow its signal to be carried over the satellite service expires Friday, Aug. 18 at 7 pm. With negotiations still ongoing, Dish is offering its Providence subscribers free installation of a free antenna to receive local Providence over the air stations if they also agree to cancel Dish’s local station add-on package (just under $10/month).

“We’ve been actively working to negotiate an agreement that keeps ABC6 available on Dish, but Citadel’s unbending attitude and outrageous demands show that this broadcaster has no intention of coming to a deal,” said Dish executive vice president of marketing, programming and media sales Warren Schlichting.

More and more consumers are amenable to switching back to free over the air reception to combat rising subscription costs, and providers are finding new ways to accommodate their customers, even at the risk of losing add-on fees from canceled local station packages.

Providence, R.I.

With local television station retransmission consent fees rising faster than other cable and satellite programming fees, some providers would prefer to drop local stations but cannot without alienating customers. The biggest impediment to getting customers to switch to over-the-air reception is signal quality.

In some markets, local station reception can vary considerably depending on where the customer watches. Digital reception problems cause pixelation and picture freezes, and correcting these can require regular antenna repositioning or an outdoor antenna, especially in fringe reception areas.

In Providence, several thousand Dish customers have switched back to over the air reception after being offered a free antenna, which offers as many as 45 free broadcast TV channels from Rhode Island and adjacent markets.

Will the FCC’s Spectrum Auction Improve Your Service? Let’s Look at the Coverage Maps

Four large telecom companies won the bulk of the available licenses to operate their wireless services on the upcoming 600MHz band, once UHF TV channels occupying part of it vacate. But what exactly did AT&T, Comcast, Dish, and T-Mobile buy and where? Mosaik, a mapping firm, produced maps (courtesy Fierce Wireless) showing exactly where the four companies won 600MHz spectrum in the recent auction. The differences are striking. T-Mobile effectively won the right to launch new service almost everywhere in the country, in part because it acquired a huge number of cheap, low-demand licenses in largely rural areas.

Dish’s plans for its spectrum remain a complete mystery, while Comcast’s winning bids are entirely within areas where it provides cable service. AT&T, although already holding a large supply of low band frequencies, apparently needs more capacity in larger cities, and paid handsomely to get it.

AT&T

Most of AT&T’s winning bids cover larger cities where it already operates an extensive cellular network. Among the areas where AT&T can expand service: Philadelphia, Washington, Baltimore, St. Louis, Birmingham, Mobile, Tampa, Atlanta, Dallas, Phoenix, Las Vegas, San Francisco, Salt Lake City, Seattle, Minneapolis and Little Rock. But AT&T also grabbed licenses for rural western Massachusetts, central Ohio, and southern Michigan.

Comcast

Comcast’s winning bids consisted of 10MHz of spectrum, except in Nashville where it nabbed 20MHz. Comcast grabbed enough spectrum to cover every city in Florida except Tampa (where Charter provides cable service). The cable company focused heavily on east and west coast bids, winning spectrum across much of the Pacific Northwest, the Boston-NYC-DC corridor, and Illinois and Indiana. The only downside is that 10MHz is not a lot of spectrum to support a large wireless service, but then Comcast does not require that at this time, because it will rely primarily on a shared arrangement with Verizon Wireless to power Xfinity Mobile.

Dish Network

What Dish intends to do with its spectrum remains a complete mystery, but it grabbed a significant amount of it in New York City and its nearby suburbs, including Connecticut. It also won respectable quantities of frequencies in Alaska, California, Florida, Puerto Rico, Seattle and Portland, and several midwestern and south-central cities.

T-Mobile USA

T-Mobile published a similar map as part of its press package claiming victory in the spectrum auction. This map better highlights T-Mobile’s extensive spectrum wins in all 50 states and Puerto Rico. If T-Mobile uses it all, it will command similar coverage areas comparable to Verizon and AT&T. T-Mobile will manage this without any need to merge with anyone else, as AT&T and Sprint have historically argued in their past failed efforts to acquire T-Mobile.

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