EchoStar/ Sling's $39.99 Solution

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EchoStar Holding Corp. announced at CES that it has teamed up with Sling Media to brand a converter box that it said will comply with the National Telecommunications & Information Administration's specifications for devices that can be covered entirely by the NTIA's subsidized $40 coupons.

And at a retail price of $39.99, the TR-40, according to EchoStar, will cost only the price of the sales tax, if any, on the box. And in the handful of states without sales tax, the government could even save a penny.

The news came as the NTIA unveiled its coupon—more like a gift card with magnetic strip and security hologram—which viewers can apply for now. The boxes have been expected to retail for $50 to $70, but EchoStar just changed that range.

EchoStar Chairman Charlie Ergen agreed that the TR-40's price point is "a dramatic announcement," considering LG Electronics' price point of $59.95, and conceded that EchoStar would lose money on the product. But he said that if the product is successful, it will free up broadcast spectrum, which is of benefit to everyone, and perhaps buy EchoStar a little goodwill when a free-over-the-air TV viewer decides to move to a pay TV service.

"No company has really stepped up to make this transition happen," he added. "We're saying that we will make a product available for $39.99, and there's no reason the digital transition can't take place."

The TR-40 —which will be sold under both the EchoStar and Sling brands—will be available online, at EchoStar retailers and at the 5,000 brick-and-mortar retailers that currently sell Slingboxes. It will be available in limited quantities by March.