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Dish Debuts Satellite Broadband Service for Rural Clients

Dish Network Corp., the second-largest U.S. satellite-television provider, introduced a nationwide broadband-Internet service called DishNet that’s aimed at rural customers.

The service will start at $39.99 a month for download speeds of 5 megabits per second with data plans of 10 gigabits, Englewood, Colorado-based Dish said today in a statement. Most satellite customers can upgrade to a 20-gigabit plan with speeds of 10 megabits per second for $49.99. Combining DishNet with Dish’s satellite TV service saves customers $10 a month.

Dish, which ranks second to DirecTV in U.S. satellite customers, is targeting the 14.5 million rural Americans who have slower Internet access or no online connection at all. While 10 megabits per second is a fraction of what’s offered by cable and fiber-optic lines in urban areas, it’s fast enough for most applications, such as social networking, video streaming and Internet-based phone calls, Dish said.

“We believe today’s announcements should make Dish a stronger player in the high-speed data marketplace,” Marci Ryvicker, an analyst at Wells Fargo & Co. in New York, said in an e-mail.

The new service will rely on a satellite from sister company EchoStar Corp., people familiar with the project said last month. Dish and EchoStar can handle about 2 million new Internet customers with the service, one of the people said. The EchoStar 17 satellite was launched into orbit July 5.

EchoStar and Dish became separate companies in January 2008, with Charlie Ergen remaining the chairman of both.

Wire-line Service

“With nearly one in four rural residents lacking a high-speed connection, reaching these underserved markets is vital,” Chief Executive Officer Joseph Clayton said in the statement.

Dish also will fold its current wire-line broadband service, available in 14 states, into the DishNet brand. That product offers 7-megabit speeds for $29.95 a month.

Dish shares rose 1.8 percent to $30.97 at the close in New York. The stock has climbed 8.7 percent this year. EchoStar, up 35 percent this year, rose 1.1 percent to $28.35.

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