Pegasus Complains About DISH Retailer Sales Practices

Pegasus Communications, the big reseller of DirecTV services in rural areas, complained to the Federal Communications Commission that individuals associated with EchoStar are using misleading and false statements about the company's pending merger with its small dish rival to convert subscribers to DISH Network.

In a filing sent to the FCC this week, Pegasus said some individuals associated with DISH Network are allegedly attempting to convince Pegasus' DirecTV subscribers that they must switch to DISH Network due to the pending merger. The filing contained a letter Pegasus sent to EchoStar's Senior Counsel Christopher Melton, which said the alleged events are apparently intended to "deceive Pegasus subscribers into believing that they have no alternative but to switch services to DISH Network."

One correspondence sent to Pegasus customers in Alabama, which appears to have come from an independent retailer, said, "DISH Network will be the only satellite service available after the merger is complete, so if you switch before all of this happens then there will be no charge." Pegasus also said in its letter that a DISH Network sales representative told Pegasus subscribers in Texas that DISH had purchased both DirecTV and Pegasus, and that DISH Network had to convert subscriber equipment.

The letter Pegasus sent to EchoStar on Wednesday contained 10 instances of sales pitches using the pending merger in an attempt to convert Pegasus customers. According to the FCC filing, Pegasus has been in contact with EchoStar concerning the sales practices since October, the month EchoStar and DirecTV first announced their intentions to merge.

In response, EchoStar spokesman Marc Lumpkin said the company takes all alleged claims seriously. "There have been isolated issues, some of which related to independent retailers, since we entered into our merger agreement," he said. "None of these incidents involved EchoStar."

Lumpkin said EchoStar has investigated each incident, and believes that they were resolved. Any retailer who sells EchoStar products who is found to engage in inappropriate activities is subject to discipline up to and including termination, he said.

Lumpkin added, "Obviously, EchoStar competes with Pegasus. We have received reports of Pegasus' retailers distorting the facts about the benefits of the pending EchoStar/Hughes merger. We hope Pegasus will discipline their retailers who may have engaged in such activity."

From SkyReport (Used with Permission)