- - - NRTC Addresses DirecTV Dispute - - -

NEW YORK - The National Rural Telecommunications Cooperative would consider operating its own satellite, leasing capacity or appealing to the government for assistance in order to ensure local network service for rural DBS subscribers, the organization.s president said Thursday.

"I think we need to be creative, but we need to find a way to serve those markets," NRTC President Bob Phillips said at the 12th semi-annual SkyFORUM satellite industry financial symposium. The event, which logged roughly 335 pre-registrants, included interviews with other industry executives and panel discussions about issues shaping the future of the direct broadcast satellite business, such as interactive television and the multiple dwelling unit market.

SkyFORUM was held at the Marriot Marquis Hotel in New York City.

In addition to talking about the importance of local-into-local service to the NRTC, Phillips reviewed the cooperative.s current legal dispute with DirecTV regarding the right to distribute premium channels previously managed by U.S. Satellite Broadcasting. He said he is optimistic the two parties will reach an agreement but the NRTC remains committed to taking the matter to court should that be necessary. "We are prepared to go the distance," said Phillips.

One of the largest companies affected by the outcome of the litigation is Pegasus Communications. The president and CEO of that company, Marshall Pagon, also spoke during an on-stage SkyFORUM interview. Pegasus Satellite Television is the largest independent provider of DirecTV in NRTC areas.

Pagon also underscored his hope that Congress will pass favorable legislation regarding the local-into-local issue. "Few people in our industry understand how dysfunctional the process is for determining if customers are eligible for distant signals," he said.

And Pagon said rural areas continue to represent a growth market for satellite television, predicting that some rural markets could reach as much as 40 percent DBS penetration in the near future. "Cable systems are small and not being upgraded," he said. "I think you will see continued growth of penetration for DBS providers."

- - - DirecTV: More Local Channels At 101 - - -

DirecTV said it's ready to deliver local broadcast network channels for up to 20 markets from its satellites at 101 degrees, the company's primary orbital slot.

The new effort is a change from the company's original plan to deliver local channels from the 101-degree location for only New York and Los Angeles. Satellite delivery of local broadcast stations still requires the passage of legislation now before Congress.

DirecTV also plans to deliver local broadcast network channels to additional markets from satellites at 110 degrees and 119 degrees. DirecTV said its initial plans call for the delivery of local channels by satellite to approximately 50 million homes, or about half of the nation's television households.

- - - DBS Execs Focus On Local Channels - - -

NEW YORK - Leaders for the nation's two DBS platforms focused on delivery of local channels via satellite at Thursday's SkyFORUM symposium in New York City.

DirecTV President Eddy Hartenstein spoke about his company's plans to deliver local broadcast network channels for the top 20 TV markets from its prime orbital location at 101 degrees. He said DirecTV will be ready to deliver channels for those markets "as soon as legislation passes."

Since current satellite TV rules will lose their effectiveness at the end of the year, Hartenstein stressed the need to get legislation passed before the end of the Congressional session. There is hope a bill will be signed by mid-October, "but realistically it could be around the end of October," he said.

Hartenstein also said there won't be any trouble getting retransmission consent for the local-into-local effort. "That's not going to be a problem. We're pretty comfortable with that," he said.

He denied that his company is making any exclusive deals with broadcasters.

EchoStar Chairman Charlie Ergen estimated that the company's local channel effort could center on 50 to 60 markets. But must carry mandates and other legislative items may hinder aggressive plans for local channel delivery. "I would need to see what the local-into-local legislation says, then I can tell you (how many markets EchoStar can serve)," he said.

He added, "I hope Congress will do the right thing for the consumer and for the industry."

The satellite that could become the centerpiece of the company's local channel effort, EchoStar 5, is expected to launch next week, Ergen said. The flight for the new satellite has been delayed twice due to weather and factory testing issues with the rocket.

- - - Justice Approves Part of COMSAT Deal - - -

The first phase of a proposed merger between defense contractor Lockheed Martin and satellite access provider COMSAT gained Justice Department approval Thursday.

The department's antitrust division said it would not challenge Lockheed's bid to acquire 49 percent of COMSAT, which transmits voice and video signals by satellite. Lockheed's offer to purchase the 49 percent stake at $45.50 a share is scheduled to expire Saturday. Shareholders approved the deal last month.

The Justice Department did not stipulate any conditions for allowing the acquisition to go through.

On Wednesday, the Federal Communications Commission approved the COMSAT purchase, which will enable Lockheed Martin to expand its business away from defense and into the commercial satellite arena. For the companies to complete the proposed merger, Congress will have to lift certain limits on ownership of COMSAT included in a 1962 law. That year Congress chartered COMSAT to keep then-telephone monopoly AT&T from extending its control to international satellite communications.

- - - Pegasus-Golden Sky See Sub Gains - - -

Pegasus Communications and Golden Sky Systems, the big independent providers of DirecTV through affiliates of the National Rural Telecommunications Cooperative, reported their August subscriber gains Thursday.

Pegasus' net additions for the month totaled 26,514. That helped push the company total to 594,422. Subscribers on a pro-forma basis amounted to 606,749.

Golden Sky reported 17,200 additions from internal growth and 300 through an acquisition. That takes the company's total to 329,700.

NRTC's DirecTV business added 52,793 net new subscribers in August - the best monthly gain for the cooperative. As of Aug. 31, NRTC had 1.257 million subscribers.

- - - ON TV: - - -

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