StarBand Settles with EchoStar
By Monica Hogan -- Multichannel News, 6/21/2002 7:00:00 AM
StarBand Communications Inc. confirmed in a press release Friday that it has settled a dispute with one of its early partners, EchoStar Communications Corp., over customer-billing and payment issues.
According to published reports, EchoStar has agreed to pay $710,000 to StarBand, which, in turn, has agreed not to pursue litigation against the direct-broadcast satellite provider. EchoStar will transition billing and customer-service responsibilities for StarBand retail customers to StarBand.
A U.S. Bankruptcy Court must first approve the settlement. Although StarBand filed for bankruptcy protection earlier this year, it still sells and distributes its two-way satellite Internet service. According to StarBand, EchoStar's Dish Network dealers represent StarBand's largest distribution channel.
Although an early supporter of StarBand, EchoStar this year withdrew additional financial support from the fledgling company, and it has said publicly that two-way satellite Internet services are unlikely to reach profitability unless EchoStar is allowed to merge with Hughes Electronics Corp.
Economies of scale would allow the merged company to invest in newer technologies, which could be offered to consumers at a lower price, EchoStar chairman Charlie Ergen has argued.
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