Nov. 16 (Bloomberg) -- EchoStar Communications Corp., the second-largest U.S. satellite-television provider, said a 125- person town in Texas changed its name to DISH, the company's stock ticker, in exchange for free TV services.

Clark, Texas, legally changed its name to DISH yesterday at a city council meeting, Mayor Bill Merritt said at a press conference today. EchoStar in August made the offer of free programming for 10 years to a U.S. municipality willing to rename itself.

EchoStar is using the contest to publicize its Dish Network as it is confronted with greater competition from DirecTV Group Inc., the biggest satellite-TV provider, as well as cable and telephone companies. Residents of Clark, located north of Dallas, don't have access to cable and most subscribe to satellite TV.

``The vast majority of the residents out here wanted to change,'' Merritt said. ``I'm sure that there are some out there who have an attachment to the name Clark and wanted to keep it.''

EchoStar's shares fell 73 cents, or 2.9 percent, to $24.52 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The stock closed at its lowest level in almost three years.

Clark, formed five years ago, was named after its founder L.E. Clark, who lost the mayoral election to Merritt, 31, earlier this year. Merritt said he expects free TV will motivate people to move to DISH, and a higher population may help increase the town's budget, which was $50,000 last year.

New Identity

``This becomes in some respects our galactic headquarters,'' said Michael Neuman, president of EchoStar's Dish Network. He said EchoStar may issue press releases from DISH.

DISH, a rural town with two stop signs, joins Half.com, Oregon, and Truth or Consequences, New Mexico, as a municipality changing its name to one sponsored by a company.

EchoStar will pay for new town signs, satellite TV for DISH's 55 households, and other costs associated with the name change. The company, which has 11.7 million customers, estimated the service would cost about $4,500 per household. DISH residents will be billed for extra features and upgrades from a 60-channel offering.

``DISH is something that people are proud of and want to keep forever and have a heritage,'' Merritt said. The town has no intention of changing its name again, he said.

To contact the reporter on this story: Anthony Massucci in New York at amassucc@bloomberg.net