DirecTV Ends National Rural Telecommunications Cooperative Exclusive Agreement

SPACEMART

El Segundo CA (SPX) Jun 03, 2004
DirecTV Inc., a unit of The DirecTV Group, Inc. and provider of the nation's leading digital multichannel television service, announced Tuesday that it and the National Rural Telecommunications Cooperative (NRTC) have agreed to end the NRTC's exclusive DirecTV service distribution contract effective immediately. Since 1994, the NRTC has had exclusive rights to distribute most DirecTV services in rural NRTC territories.

In connection with this agreement, the NRTC's separate agreements with its members and affiliates, including Pegasus Satellite Television, Inc., for sale of DirecTV services, have been terminated, with an effective date of 90 days from today.

The NRTC and DirecTV have further agreed to enter into a new relationship that will provide NRTC members an opportunity to continue to participate as non-exclusive DirecTV retailers and service providers.

Until the effective date of the member and Pegasus contract terminations on Aug. 31, 2004, DirecTV will provide services through the NRTC to its members and Pegasus so that DirecTV service to customers in NRTC territories will not be disrupted.

"We believe that terminating the NRTC's exclusive distribution agreement is in the best interest of consumers and all parties involved," said Steve Cox, executive vice president, Sales, Distribution and Business Development, DirecTV, Inc.

"With the settlement of the disputes with the NRTC and its members last year by mutual agreement and the subsequent successful conclusion of DirecTV's litigation with NRTC affiliate Pegasus, the time was right for the NRTC and DirecTV to reach this new agreement.

"Management of both the NRTC and DirecTV recognized that creating an artificial divide between rural America and the rest of the country for distribution of some DirecTV services made the DirecTV service less competitive with other multichannel video providers," said Cox.

"Furthermore, we have seen the number of subscribers to DirecTV services in territories covered by the NRTC agreement steadily decline - primarily in Pegasus territories - in the last few years. We believe the termination of the old distribution arrangement will allow DirecTV and NRTC to reverse this trend and compete more effectively in rural America. This can only be beneficial to consumers."

NRTC members, but not affiliate Pegasus, also will have the option to either enter into direct contracts with DirecTV to continue as an exclusive provider of DirecTV service in their territories through June 30, 2011, or, to sell the contract rights to DirecTV that were negotiated as part of their litigation settlement.

"Providing these options to the NRTC members who agreed to settle their disputes with DirecTV assures them that they will receive the benefits of the settlement while providing them with attractive alternatives to continuing marketing and selling DirecTV services," said Cox.

Although Pegasus rejected the litigation settlement, and had its claims dismissed last month, DirecTV has simultaneously made a cash offer to Pegasus - payable in either a lump sum or monthly payments - if Pegasus agrees to an orderly transfer of its subscribers to DirecTV that is completed before Aug. 31, 2004.

"While neither the NRTC nor DirecTV has an obligation to Pegasus on account of the termination of its contracts, DirecTV has extended an offer that we believe is fair and reasonable," said Cox. "We are excited about this new chapter in DirecTV's business, which will allow us to cohesively market our service to consumers in NRTC territories and to incrementally expand our owned-and-operated subscriber base."

Through the end of the first quarter of 2004, the NRTC, its members and Pegasus provided DirecTV service to approximately 1.5 million customers.

SPACEMART

Orbcomm Teams With Delphi To Provide Telematics Data Solutions

Dulles VA (SPX) May 24, 2004
Orbcomm Inc, a global satellite telecommunications company, on Monday announced that it is working in tandem with Delphi Corp to offer the pacing technologies needed for low-cost, highly robust telematics applications for the global automotive and other marketplaces.

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