A potential showdown between DirecTV Inc. and its rural partners was avoided
Monday when the direct-broadcast satellite company settled a long-running
lawsuit filed by the National Rural Telecommunications Cooperative over their
reselling arrangement.
However, Pegasus Communications Corp., the biggest NRTC DBS reseller, did not
join the settlement.
The dispute centered on how long the rural resellers have the right to retail
DirecTV programming and whether the rural resellers had the right to resell Home
Box Office and other pay networks in their franchise areas.
Under the settlement, no money immediately changes hands.
The NRTC agreed that its members lose the right to distribute DirecTV in
2011, reflecting the life initially expected for DirecTV’s first satellite,
DBS1, which has been unusable for years. In 2011, DirecTV will only pay $150 per
subscriber.
Publicly traded Pegasus, meanwhile, had been receiving $1,200 per subscriber,
and its stock started a 37% plunge Monday morning.
Pegasus declared that neither the NRTC nor DirecTV can change its rights. But
a DirecTV spokesman noted that Pegasus’ right to deliver programming comes
through the NRTC contract.
