LEGAL UPDATES

DIRECTV and DISH Network have filed lawsuits in three states seeking to overturn unfair taxes imposed only on satellite television customers. These suits were filed to protect satellite TV customers, who already pay their fair share of taxes and should not be forced to suffer from an unfair tax policy that singles them out for choosing a competitive and affordable alternative to cable.

Listed below are summaries of the lawsuits currently filed across the United States.

KENTUCKY

In March 2005 Kentucky passed a tax law imposing combined excise and gross revenues taxes of 5.4 percent on satellite television services. Cable television companies effectively are exempted from almost all of the tax because the new state taxes they pay are redistributed to local governments in lieu of the five percent franchise fee previously paid by cable companies -- the end result is they pay hardly any new tax at all.

On May 4, 2005, DIRECTV and EchoStar filed suit in federal court, DIRECTV, Inc., et al. v. Department of Revenue, challenging the constitutionality of the new taxes because they give an unfair competitive advantage to local cable television companies and discriminate against satellite television subscribers.

FLORIDA

Florida's communications services tax discriminates against satellite television companies and their subscribers by imposing a rate of tax (10.8 percent) that is substantially higher than the tax rate imposed on cable television companies (6.8 percent). This is one of the highest taxes on television services anywhere in the country.

On May 4, 2005, in DIRECTV, Inc., et al. v. State of Florida Department of Revenue, EchoStar and DIRECTV filed suit in state court in Tallahassee to challenge the constitutionality of this tax because it discriminates against satellite TV viewers.

OHIO

On June 26, 2003, Ohio Gov. Bob Taft signed into law a six percent sales tax on satellite television service; this tax was not imposed on cable television services. That same day, DIRECTV, Inc. and EchoStar Satellite Corporation and its DISH Network filed a lawsuit against the state of Ohio (DIRECTV, Inc. et al v. Zaino).

The suit seeks a declaratory judgment holding that the satellite-only tax is unconstitutional and requests a permanent injunction against enforcement of the tax on satellite television customers in Ohio.

TENNESSEE

DIRECTV, Inc. and EchoStar Satellite Corporation and its DISH Network filed a lawsuit on Aug. 19, 2003 challenging the legality of Tennessee?s 8.25 percent sales tax on the entire amount of satellite customers? monthly subscription fees.

The lawsuit, DIRECTV, Inc. et al. v. Chumley, claims that the satellite television tax is unconstitutional since it discriminates against satellite television customers by not also taxing local cable television customers equally.

NORTH CAROLINA

Following an unsuccessful request to the North Carolina Department of Revenue to obtain refunds for customers who had paid millions of dollars in taxes under a 5% satellite-TV tax, a lawsuit was filed against North Carolina. DIRECTV, Inc. and EchoStar Satellite Corporation and its DISH Network filed the suit to challenge the tax that discriminates against satellite TV viewers while benefiting local cable TV firms.

The lawsuit, DIRECTV, Inc. et al. v. North Carolina, challenges the constitutionality of the state?s taxing policies and charges that local cable companies, who are not similarly subject to the tax, are thereby given an unfair competitive advantage.

STOP THE SATELLITE TAX :: LEGAL ACTION UPDATES

DISH Network and DIRECTV File Suit in Florida Challenging Constitutionality of Satellite Tax
05/05/2005 :: FOR IMMEDIATE RELEASE

DIRECTV and DISH Network File Suit in Kentucky Challenging Constitutionality of New Satellite Tax
05/05/2005 :: FOR IMMEDIATE RELEASE

DISH Network and DIRECTV File Lawsuit in North Carolina, Claiming Sales Tax on Satellite TV Customers is Unconstitutional
10/01/2003 :: FOR IMMEDIATE RELEASE

DIRECTV and DISH Network File Suit in Tennessee Challenging Discriminatory Taxes on Satellite TV Customers
08/19/2003 :: FOR IMMEDIATE RELEASE

DISH Network and DIRECTV File Suit Against Ohio For Passing Discriminatory Satellite-Only Sales Tax
06/26/2003 :: FOR IMMEDIATE RELEASE

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