A new satellite-dish giveaway program in New York City is targeting Time Warner Cable and Cablevision Systems subscribers in an area where they are particularly vulnerable to defections ? Brooklyn.

Through a distributor reselling the Dish Network service owned by EchoStar, Dish is giving away at least 300 satellite dishes in Brooklyn, where cable subscribers are susceptible to being lured away by attractive satellite offers.

While the number of dishes being given away is small, the reseller, Lasting Satellite, has also done giveaways recently in Oakland, Calif., and Phoenix, Ariz., according to a sales representative. The Brooklyn program underscores the fierce nature of the battle for subscribers, in which satellite providers target cable's weak areas.

?Wherever cable doesn't have digital it's at a disadvantage to satellite,? says Ray Katz, an analyst at Bear Stearns.

Time Warner Cable, which serves the western third of Brooklyn, including Brooklyn Heights, Cobble Hill, Park Slope and Greenpoint, has upgraded only about 70% of its coverage area there, meaning thousands of its Brooklyn subs do not yet have access to the crystal-clear pictures and sound and additional channel offerings of digital cable. Cablevision, which introduced its digital service in late September, currently offers digital only in the Western part of Long Island, although it will offer the service in additional areas next year.

Cablevision declined to comment.

Time Warner Cable expects to complete its upgrade in Brooklyn early next year.

?Brooklyn is a very important part of our system,? says David Goldberg, VP-marketing at Time Warner Cable of New York City. ?We want to make sure that everything is available to [those subscribers].?

Goldberg notes that unlike satellite, Time Warner Cable subscribers can take a bundled offering of basic or digital cable and high-speed Internet access, a package that satellite can't yet offer economically. In addition, Time Warner customers have access to the New York 1 news channel, which has grown in importance in the five boroughs since the September terrorist attacks.

Satellite providers have enjoyed great momentum in adding subscribers in recent years compared with cable, in large part due to aggressive distributor affiliate programs, such as the one currently taking place in New York. While the cable industry will add about 700,000 new subscribers this year, satellite providers will add 2.7 million, or nearly four times as many, estimates ABN Amro. To be sure, cable is a much more mature industry than satellite and currently controls about 80% of the entire pay-TV market. That means cable has more subscribers to lose ? and will have to spend more to keep customers.

The New York giveaway is threatening to Time Warner and Cablevision because both companies have seen basic subscriber growth slow this year.

In the third quarter, Time Warner Cable nationally saw basic-subscriber growth of 0.4%, less than the 0.7% it saw in the second quarter. TWC, which doesn't break down growth market by market, expects 0.7% basic-subscriber growth for the year.

Time Warner has upped the ante in the fight to keep customers. The New York system began a dish buy-back program a couple of months ago, according to marketing VP Goldberg. TWC will pay satellite subscribers $75 for their dish, plus $25 per receiver. In addition, TWC offers three free months of digital cable (where available), every premium channel Time Warner Cable offers and Road Runner high-speed Internet service.

So how many dishes has TWC NYC bought back?

?We're doing OK,? says Goldberg, although he adds he can't reveal specific numbers.

As for Cablevision, it is reportedly preparing to enter the direct broadcast satellite business. Chairman Charles Dolan told Newsday the company has a satellite under construction; it will operate under a DBS license owned by Rainbow Media Holdings.

After reducing in August its basic-subscriber growth expectations for the year to 1% from 1.75%, last month Cablevision further lowered its expectations for basic-subscriber growth throughout its New York footprint to 0.75% to 1%.

On an August conference call, Pat Falese, SVP-product management at Cablevision, said competition from direct broadcast satellite was hurting Cablevision's subscriber growth.

Subscriber acquisition costs for EchoStar and DirecTV are expected to decrease if the two companies get approval for the merger they announced on Oct. 26, currently the market-share grab is very costly.

EchoStar's subscriber-related expenses were $970 million in 2000, up 40% over 1999. That increase was primarily attributable to an increase in its subscriber promotion subsidies, EchoStar said in a filing with the Securities and Exchange Commission.

Most Dish Network sales are through independent retailers; EchoStar then pays the distributor a commission. Dish's marketing strategy is to build the largest possible subscriber base, thereby ensuring future revenue. But since EchoStar subsidizes the upfront costs by giving away the equipment, it incurs significant costs. An EchoStar spokesman declined to comment on its distributor programs.

The latest satellite offer in New York includes a free dish, free installation, two free receivers and one month of free programming. The customer pays a one-time activation fee of $49 and then $41 a month for 113 channels, plus $4.99 monthly for broadcast stations.

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