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You can connect with either method you described, the fee for not connecting is $5 per month. In Washington, one dish would do, but you have better signal strength if you use two. Local installers in your area would have the best info on this.
Size of the dish(es) vary, your local install can show you the dishes.
You can buy your way out of your contract, Tivo violation has nothing to do with current dvr receivers and would not give you a free out. DVR is not leaving Dish.
 
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