Is Echostar breaking any laws with MPEG-4 transition?

jsanders

SatelliteGuys Pro
Original poster
Dec 4, 2003
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Here are portions a couple of notes I have emailed to ceo@echostar.com that explain why I think their tactics aren't so honest, and I suggested collusion.
What do you think?

As an "upgrade" offer, Echostar is offering $200 for receivers that individuals paid $1000, and $699 for in the past two years. We expect attrition in value when new MPEG-4 receivers roll out, as they will not be able to receive future channels. However, they are still as useful as they have been in the past, receiving MPEG-2 HD content. Echostar has artificially set the used price of these older receivers to $200. How? As of February 1, Echostar prevents its customers from selling the old receiver because Echostar won't allow a buyer to activate a used or new 942/921/811/6000 for MPEG-2 HD programming, something that Echostar produces and the receiver is fully capable of receiving. Then Echostar takes the artificially and prematurely defunct receiver and makes a profit off of the customer's DVR at the artificially low price by selling it to the Canadian customer for Express VU.

EBay has a market that can naturally determine the price of new and used equipment. Echostar's tactics artificially manipulate the free market value to Echostar's advantage, and at the expense of its own customers. I think what you are doing is illegal. If for some reason it is legal, it certainly is morally bankrupt, and does not engender good faith or even an iota of trust with its customers.

In all honesty, the $200 rebate is lesser in value than it appears. It only is offered as a mail in rebate to those who trade in their OWNED equipment towards Echostar's leased equipment, while entering the customer into a two year commitment of Echostar's terms.

If the person already has HD programming, that individual can activate their 942/921/811 for HD programming, because you don't have the facility to deny it to them. You are discriminating here, under some circumstances, people can still activate their 942 and watch HD programming, in other circumstances they can't.
Echostar is in the business of making money. Why refuse to let people subscribe to your programming when you can make money doing it and they are willing to pay for it??

The new programming isn't MPEG-4 in the first place! We already know that the new "MPEG-4" programming is really an MPEG-2 bitstream and the only thing that changed is the MPEG-4 header. In other words, all existing equipment can still view the new channels.

If you don't even have real MPEG-4 encoded material, why do you insist on restricting people using equipment that they worked very hard to pay for! The 942 and 921 were not cheap to buy, and we don't want to see the value of our investment go to nothing after less than a year for the case of 942 owners!

What do you think? They are migrating as many people as they can to a new technology by artificially fixing the price of a free, used market that is supposed to be outside Echostar's control. They make a profit out of our paintful migration. And to top it off, the bottom line is that the MPEG-4 encoding that they are trying to migrate us to doesn't even exist! The whole thing is a farse.
 
If you don't want to do the deal then hold on to them until they have to swap them for free when they are ready to turn off the Mpeg2 streams. By then the price will have to be a free swap out. You won't get any new channels or HD LILs until you do however......

Both D* and E* are going to lease only to try and curb piracy by removing old boxes from the EBay channel. The good news will be that future hardware failures will be their responsibility to fix. The bad news is that you will have to pay for a replacement if you spill a beer on it or lightning hits the phone pole and fries it (you all have surge protectors on the phone line right?)
 
I agree though that they artificially inducing demand for the swapout by adding the new channels and requiring new hardware to see them. I don't mind the tactic as it helps move along the transition, but I DO mind the fact that they don't seem to have enough receivers to satisfy demand. The easy fix is to turn on the Mpeg2 streams for a three months or so until they have enough machines in the pipeline. I'll still upgrade as $99 or $299 is a good deal. The gun to my head doesn't get them anything but a lot of people fighting over too few boxes.....
 
BobMurdoch said:
If you don't want to do the deal then hold on to them until they have to swap them for free when they are ready to turn off the Mpeg2 streams. By then the price will have to be a free swap out.
The problem is that a free swap out isn't for free! They will make you sign a lease to get that "free" box! You have to agree to their terms, and commit for a couple of years. I don't want to lease, and I don't want to subscribe to anything but the HD pack. The lease is quite expensive for me. AT60 = $36 x 2 years = $864 (more than the cost of the new vip622). Maybe At60 will all be in HD in 2 years, but I doubt it.
BobMurdoch said:
The good news will be that future hardware failures will be their responsibility to fix. The bad news is that you will have to pay for a replacement if you spill a beer on it or lightning hits the phone pole and fries it (you all have surge protectors on the phone line right?)
I agree with the rest of what you had to say. E* is trying to switch people to leasing only, and the tactics they use to do this are going to really upset their customers that bought equipment. There isn't any deal for those that own and want to continue owning their own equipment. Basically, you have to trash the old one and buy a new one because they are making the resale value of the old one go to zero prematurely for fake MPEG-4!
 
This is the case now with the upgrade plan. It will get less restrictive when demand drops and they sweeten the deals. They will want to kill the Mpeg2 HD streams and can't do this until they switch out EVERY box. I've heard a March 2007 switchoff date, but I don't see how they can switchout 3 million boxes by then (I'm assuming that 20% of subscribers have HD equipment).

They have us now because they know most of us early adopters will do ANYTHING to get all the HD channels they offer......
 
jsanders said:
The problem is that a free swap out isn't for free! They will make you sign a lease to get that "free" box! You have to agree to their terms, and commit for a couple of years. I don't want to lease, and I don't want to subscribe to anything but the HD pack. The lease is quite expensive for me. AT60 = $36 x 2 years = $864 (more than the cost of the new vip622). Maybe At60 will all be in HD in 2 years, but I doubt it.
I agree with the rest of what you had to say. E* is trying to switch people to leasing only, and the tactics they use to do this are going to really upset their customers that bought equipment. There isn't any deal for those that own and want to continue owning their own equipment. Basically, you have to trash the old one and buy a new one because they are making the resale value of the old one go to zero prematurely for fake MPEG-4!

Not many know about the info on the retailer chat that said that no existing HD boxes will be activated after 2/1. Once word of THAT info nugget gets around you will hear some yelling......
 
BobMurdoch said:
Both D* and E* are going to lease only to try and curb piracy by removing old boxes from the EBay channel.
It seems to me that this is not the best way to curb piracy. The new smart cards have better encryption than old ones do, I think that is going to make it very hard to hack a box now. But here is the main point, they still have their audit police calling people who don't connect their phone lines. That means people can be account stacking regardless if they lease or own. It makes no difference! The good news is that account stacking is traceable, and E* can hold people accountable who do it.
The only other way is by hacking the box, and I think that new smart cards have made it almost impossible for those crooks to get away with. :)
 
But it will cut down on the supply of owned boxes in the channel if ONLY hackers and Canadians are buying them (or even.... gasp... Canadian HACKERS!)
 
I guess you're ultimately right about that one Bob. I hope they don't get rid of the right to purchase like D* did.
 
A lot of us get OTA nicely, and E* and D* will need to realize that when TiVo comes out with an HD OTA Tivo, it will be a viable alternative, and maybe even a tempting one. The cost of TiVo guide data isn't going to go up at the same rate as subscription TV with ESPN in the lineup!!!!


Hopefully that new choice will make the other guys understand that they have to earn our money now, not just charge us for a bunch of stuff we don't want to see like shopping channels because we didn't get good reception in the old analog days!
 
People say 942s will become worthless, but if you had an SD set, wouldn't you want to buy a 942 for, say, $200? They didn't say they wouldn't activate them, just not for HD.

I think I'll take the 622 lease and sell the 942 on eBay. It's the ultimate SD DVR if the price as right.
 
M Sparks said:
People say 942s will become worthless, but if you had an SD set, wouldn't you want to buy a 942 for, say, $200? They didn't say they wouldn't activate them, just not for HD.

I think I'll take the 622 lease and sell the 942 on eBay. It's the ultimate SD DVR if the price as right.

Yes it is, because you can pass untouched 480i HDMI to a external scaler(like a Iscan DVDO unit) and have it processed for the best SD quality possible

-Gary
 
There's absolutely nothing illegal about making an offer that you are free to choose to accept or decline.

D*, OTOH, used a high profile marketing effort to promote their HD with the promise of 1500 channels of HD within a certain timeframe. Not allowing the reception of those channels with the equipment purchased would certainly prompt a suit.
 

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