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Old 06-02-2004, 09:02 AM   #1 (Print)
tfederov
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We're Free At Last from Pegasus!!!!

DIRECTV and National Rural Telecommunications Cooperative End NRTC's Exclusive Distribution Agreement
Wednesday June 2, 9:17 am ET
New Agreement Will Benefit Customers, Help Competition in Rural America


EL SEGUNDO, Calif.--(BUSINESS WIRE)--June 2, 2004--DIRECTV Inc., a unit of The DIRECTV Group, Inc. (NYSE: DTV - News) and provider of the nation's leading digital multichannel television service, announced today 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.

This release may contain certain statements that we believe are, or may be considered to be, "forward looking statements" within the meaning of various provisions of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements can generally be identified by use of statements that include phrases such as "believe," "expect," "anticipate" or other similar words or phrases. Similarly, statements relating to future events also are forward-looking statements. All of these forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements due to various factors, including the outcome of any appeal which might be filed, other litigation which might be initiated or regulatory factors. More detailed information on the matters referred to in this release, including litigation and other potential factors which could affect the rights or obligations of DIRECTV, Inc., is contained in the filings of The DIRECTV Group, Inc. and DIRECTV Holdings LLC with the U.S. Securities and Exchange Commission.

DIRECTV is the nation's leading digital multichannel television service provider with more than 12.6 million customers. DIRECTV and the Cyclone Design logo are registered trademarks of DIRECTV, Inc., a unit of The DIRECTV Group, Inc. (NYSETV - News). The DIRECTV Group is a world-leading provider of digital multichannel television entertainment, broadband satellite networks and services, and global video and data broadcasting. The DIRECTV Group is 34 percent owned by Fox Entertainment Group, which is approximately 82 percent owned by News Corporation Ltd.



--------------------------------------------------------------------------------
Contact:
DIRECTV Inc.
Bob Marsocci, 310-964-4656

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Last edited by tfederov : 06-05-2004 at 12:52 PM.
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Old 06-02-2004, 09:13 AM   #2 (Print)
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WOW! Great news.

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Old 06-02-2004, 09:14 AM   #3 (Print)
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Cool to be you. I wondering how many people are about to move back home.

Of course, if your doing it for locals, you may like the new place better.

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Old 06-02-2004, 09:31 AM   #4 (Print)
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Wow, that's amazing. I figured they would at least leg out the current contract.

Now, what will Pegasus do, since they are out of the reseelling-services-for-more-money business?

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Old 06-02-2004, 09:37 AM   #5 (Print)
tfederov
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I hope burn in Hell if they'll take them. Pegasus will probably charge Satan a little extra to let him burn them. The clock starts today.

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Old 06-02-2004, 09:50 AM   #6 (Print)
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So does this effectively mean that Pegasux is dead? If I read this correctly, if you want D* and live in an NRTC area, DirecTV is now your provider, not Pegasux, correct?

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Old 06-02-2004, 10:08 AM   #7 (Print)
tfederov
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Quote:
Originally posted by GreyGhost00
So does this effectively mean that Pegasux is dead? If I read this correctly, if you want D* and live in an NRTC area, DirecTV is now your provider, not Pegasux, correct?


According to this, we'll be DirecTV customers in 90 days.

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Old 06-02-2004, 10:23 AM   #8 (Print)
Mysteryman
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I'm a little disappointed. I would have figured there would be a web site I could go to with a BIG "countdown to the death of Pegasus" clock on it created within minutes of this information being given to the public.

Welcome brothers and sisters that have suffered under the oppressive fist of Pegasus!
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Old 06-02-2004, 12:22 PM   #9 (Print)
ziggy29
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Congrats to all of you suffering with Pegasux all this time.

Looks like some modern-day Moses led you away from an oppressive Hell and into the promised land..
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Old 06-02-2004, 01:03 PM   #10 (Print)
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can someone quickly sum up how this Pegasus situation arose in the first place?

i thought satellite service was made for rural areas?

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Old 06-02-2004, 01:11 PM   #11 (Print)
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Maybe there are more rounds in the fight!

Pegasus rejects DirecTV move to end agreement
Reuters, 06.02.04, 1:26 PM ET


NEW YORK (Reuters) - Pegasus Communications Wednesday said satellite television operator DirecTV has no right to terminate an agreement that allows Pegasus to distribute DirecTV service in rural areas.

DirecTV and the National Rural Telecommunications Cooperative said they were ending their distribution agreement. Pegasus distributes DirecTV service through a contract with the NRTC.

"We categorically reject DirecTV's and NRTC's assertion that they can terminate our agreements, and intend to vigorously protect our rights," Ted S. Lodge, president and CEO of Pegasus Satellite Television, said in a statement.

Copyright 2004, Reuters News Service

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Old 06-02-2004, 01:12 PM   #12 (Print)
cneth
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Don't pop the champagne just yet:

Pegasus rejects DirecTV move to end agreement

There is more information here.

Whether or not Pegasus has a legal leg to stand on isn't clear, but they it doesn't sound like they are going to give up without a fight.

Craig
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Old 06-02-2004, 01:13 PM   #13 (Print)
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Wow, this is so funny. The best part was how the article ripped Pegasus as the basis for the change!

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Old 06-02-2004, 01:14 PM   #14 (Print)
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Quote:
Originally posted by cneth
Don't pop the champagne just yet:

Pegasus rejects DirecTV move to end agreement

There is more information here.

Whether or not Pegasus has a legal leg to stand on isn't clear, but they it doesn't sound like they are going to give up without a fight.

Craig


OUCH! This should be fun.....I knew it wasn't dramatic enough.

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Old 06-02-2004, 01:18 PM   #15 (Print)
tfederov
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[/angry] As I put the champange away... [/angry]

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Old 06-02-2004, 01:20 PM   #16 (Print)
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In any case, here's your countdown clock:

http://www.lakemirror.com/clock/countdown.html

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Old 06-02-2004, 01:25 PM   #17 (Print)
Want1394
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And this article has the simplist summary of how the financial agreements should play out.
The Street.com

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Old 06-02-2004, 01:53 PM   #18 (Print)
Mysteryman
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Quote:
Originally posted by lakemirror
In any case, here's your countdown clock:

http://www.lakemirror.com/clock/countdown.html



LOL Thats great I love it!!! Thanks!

Depending on the court cases, its probably still accurate.
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Old 06-02-2004, 01:54 PM   #19 (Print)
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Quote:
Originally posted by lakemirror
In any case, here's your countdown clock:

http://www.lakemirror.com/clock/countdown.html


Cool! Thanks!

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Old 06-02-2004, 02:01 PM   #20 (Print)
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Cool. Soon I shall no longer be a second-class citizen in the DTV world!
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Old 06-02-2004, 02:28 PM   #21 (Print)
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According to the information at work August 1, 2004 is the day it starts to transfer accounts over. They also give a special number for Pegasus customers who want DTV service. I am not sure if they can do anything right now but heres the # 866-235-2500
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Old 06-02-2004, 03:06 PM   #22 (Print)
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Quote:
Originally posted by slocko
can someone quickly sum up how this Pegasus situation arose in the first place?


The NRTC, of which Pegasus is a member, helped DirecTV pay for one of their first satellites. In exchange, NRTC members got the exclusive right to sell DirecTV service in rural areas. (I believe the contract had an explicit definition of "rural" in this context. Some "rural" areas then are no longer very rural.) The contract was set to expire with the first satellite, but there've been disputes over precisely when that was, because the satellite's expected lifespan has declined, so there've been court cases over the implications of this. Over the years, Pegasus bought up several other NRTC members, so they're now the biggest single player in this arena. They've got the most to lose by termination of the agreement, and they've been the biggest thorn in DirecTV's side, as well as in the side of their customers. (Just check out all the anti-Pegasus posts here -- but note that I'm not a Pegasus customer, and so have nothing personal against them. Having read many of these posts, though, I'm glad I'm not a Pegasus customer!)

Quote:
i thought satellite service was made for rural areas?


One of satellite's big advantages is that it works well for delivering service to rural areas, but to say that "satellite service was made for rural areas" is not quite right, at least if you mean that literally. A substantial chunk of DirecTV's customers live in urban and suburban areas, although I don't know the exact figures. AFAIK, their business plan never involved restricting themselves to rural areas or favoring rural users in any way. As a practical matter, the involvement of the NRTC has had the opposite effect, since prices in NRTC-served areas tend to be higher than in other areas.
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Old 06-02-2004, 03:14 PM   #23 (Print)
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Quote:
Originally posted by hillbilly
According to the information at work August 1, 2004 is the day it starts to transfer accounts over. They also give a special number for Pegasus customers who want DTV service. I am not sure if they can do anything right now but heres the # 866-235-2500


They're sending me the info today.

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Old 06-02-2004, 04:07 PM   #24 (Print)
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Took two calls for me. The first rep didn't know what I was talking about and sent me to installation support. The second call rendered the "give us your information and we'll send you information" answer. The wait begins...
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Old 06-02-2004, 04:21 PM   #25 (Print)
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As a non-Pegasus NRTC customer, I will check with my local provider (www.kmtel.com) to see what affect this will have on me and report back. Currently I have some pricing advantages over DirecTV national - $3.95 mirroring fee vs. $4.99 and no charge to downgrade packages. I don't know that I want to trade the ability to manage my account on the DirecTV site for any pricing increases.

Thanks for the heads up.

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Old 06-02-2004, 04:51 PM   #26 (Print)
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Thanks for the cool countdown Lakemirror!

Can I ask a really dumb question?....Well being that I didn't get any "No freakin' ways", I'll go on with the question:

Why is everyone so angry with Pegasus? I've only been a Satellite customer with them for about 8 months, but I don't have any problems with them.

Thanks,
Scott

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Old 06-02-2004, 05:03 PM   #27 (Print)
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Quote:
Originally posted by radimage
Can I ask a really dumb question?....Well being that I didn't get any "No freakin' ways", I'll go on with the question:

Why is everyone so angry with Pegasus? I've only been a Satellite customer with them for about 8 months, but I don't have any problems with them.


Check out the pricing of what you pay vs what is listed on DirecTV's website. Pegasus is basically charging a few dollars more a month for the exact same programming that millions of us are paying less for than you are. Plus if you do a search you will find that people are generally not too pleased with the customer service that Pegasus can dish out sometimes.
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Old 06-02-2004, 05:15 PM   #28 (Print)
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Correct me if I'm wrong, but in the early days of the DirecTiVo, didn't Pegasus refuse to sell DTiVo's or support DTiVo owners who paid full price for a long time?

--Dwayne

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Old 06-02-2004, 05:37 PM   #29 (Print)
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They still refer us to DirecTV for any TiVo issue.

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Old 06-02-2004, 05:43 PM   #30 (Print)
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I called the number, they said call back in a month to get into the system. The woman said they would be replacing equipment for us as well.
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