AT&T Terminates Reseller Deal With Dish

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AT&T will stop reselling Dish Network satellite TV services on Dec. 31 under the terms of the two companies’ 2003 agreement, but the telco said it’s still “evaluating” its options on whether it would offer DirecTV or Dish service in 2009 and beyond.

Dish disclosed in an 8-K filing Tuesday with the Securities and Exchange Commission that it received a notice of termination from AT&T on June 30 that ends their deal at the end of 2008.

Dish spokeswoman Kathie Gonzalez referred questions on the filing to AT&T.

Asked for additional information, AT&T spokeswoman Jenny Parker said, “In accordance with the terms of our current agreement with Dish Network/EchoStar, AT&T has provided the required six-month notification for nonrenewal of our current contract, which is set to expire at the end of the year. We continue to discuss options with Dish.”

Parker added, “We don't comment on specifics about our business-to-business relationships, but we are evaluating our options.”

In the first quarter, AT&T announced it would exclusively resell Dish satellite TV services through the end of 2008, including in the nine states served by BellSouth, which had a reseller agreement with DirecTV. AT&T bought BellSouth last year.

Last month, Dish said in an SEC filing that AT&T notified the company it will exercise put rights for its portion of a $500 million note convertible into Dish shares.

Sanford Bernstein senior analyst Craig Moffett, in a June 17 note to investors, said that AT&T exercising its put rights could be “the final nail in the coffin of merger speculation” regarding AT&T and Dish.

Moffett said that if AT&T were to consolidate its satellite relationship with DirecTV, the satellite operator would have “a clean sweep” of the relationships with telcos by virtue of its exclusive deals with AT&T, Verizon Communications and Qwest.

“Conversely, Dish Network would be left with relationships only with a handful of smaller rural telcos (and one relatively large one, in Embarq) at a time when it is already lagging badly behind DirecTV in gross addition share,” Moffett wrote.

In an e-mailed statement proffered late Tuesday afternoon, DirecTV spokeswoman Jade Ekstedt wrote “this news is between Dish and AT&T, but as we have said in the past, we are still negotiating with AT&T.”

Dish Network shares closed off 17 cents a share to $29.11 in Tuesday trading before falling another 86 cents, or 3%, to $28.25 in after-hours trading. DirecTV shares were unchanged in after-hours trading after shedding 27 cents, or 1%, to $25.64 a share in the regular trading session.

-- MCN’s Mike Farrell contributed to this article.

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