Pegasus Amends DirecTV Lawsuit

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Pegasus Communications Corp. chairman Marshall Pagon
confirmed last week that the company has amended its recent lawsuit against DirecTV Inc.
to include new charges of restraint of trade.

Pagon claimed that DirecTV illegally used Pegasus'
customer list to access subscriber data, then used that information to enforce an illegal
DirecTV receiver-quota system with Pegasus dealers and other retailers that work with
members of the National Rural Telecommunications Cooperative.

In the amended suit, filed Feb. 11 in U.S. District Court
in Los Angeles, Pegasus and fellow NRTC affiliate Golden Sky Systems Inc. asked DirecTV to
cease and desist from all illegal practices.

"We have done nothing to interfere with their business
or the business of any NRTC members," DirecTV spokesman Bob Marsocci said last week.

Pagon said the quota system -- which limits the number of
DirecTV receivers certain retailers can sell into NRTC territories -- has resulted in
severely limited product supplies starting last fall and going into the beginning of this
year.

The industrywide product shortage was exacerbated by
DirecTV's drive to convert its former PrimeStar Inc. medium-power customers to its
high-power service as quickly as possible.

Pagon claimed that DirecTV initiated the quota system
because it had no effective way to monitor a dealer-incentive program to determine whether
distributors were selling equipment into DirecTV- or NRTC-controlled territories. Some
rural dealers sell to homes both within and outside of NRTC territories.

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