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StarBand, the satellite broadband service, is settling its dispute with EchoStar.

Late Thursday, StarBand filed with the Delaware court handling its bankruptcy proceedings details of the deal aimed at ending the wrangling concerning their relationship. Part of the agreement between the two companies will allow for the continuation of bundling of both video and Internet services on a single dish, and contains a provision which states that EchoStar will not discriminate against retailers who sell StarBand service.

The deal also requires that EchoStar transition some 16,000 retail StarBand customers to StarBand, customers who had received bills and customer support from EchoStar but instead will begin getting a bill from StarBand. The deal also says that EchoStar will pay a monthly $35 fee on wholesale customers, and any missed payments tied to those wholesale customers will result in binding arbitration.

The agreement contains "complete and mutual release" language, in which both companies would be able to start over their relationship on a "clean slate" basis and there will be no legal proceedings on these issues as well as the pending merger between EchoStar and DirecTV.

In addition, EchoStar will pay $710,000 to StarBand on the effective date of the agreement, which will settle former claims between the companies, and EchoStar also promised not to hinder StarBand's Chapter 11 bankruptcy proceedings. As part of the agreement, EchoStar surrenders any veto rights on any debt or equity deals StarBand can complete.

In the deal, StarBand also will apologize for publicizing EchoStar CEO Charlie Ergen's e-mail address on one of its Web sites, and both promised not to make any more disparaging comments about either company.

The agreement will become effective on the date it's approved by the Delaware bankruptcy court handling StarBand's case.

Commenting after the filing, StarBand President David Trachtenberg said, "We are very pleased with our resolution with EchoStar. It's good for the companies and it's good for us." He added that StarBand's ability to attract equity interest "absolutely makes us more attractive to a new investor. It potentially could help us out of Chapter 11."

In a short statement, EchoStar said: "We're glad StarBand has agreed with us. We have been a good partner as EchoStar has invested $100 million in StarBand and has fulfilled its contractural obligations."

From SkyReport (Used with Permission)
 

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I'm surprised it ended this peacefully. There for a while, it looked like things were gonna get really ugly.
 

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I think Charlie just paid them off to go away. According to a report filed by Starband with the court, they still owe Dish about $10 Million. It appears that Dish agreed to pay them $700,000 to not make waves in the merger process.
 

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What an odd business practice. You owe us several million, but we'll pay YOU to shut up and go away. lol
 

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I agree, but it could make the difference in the merger though. It's a new form of blackmail. It appears that Starband management plays hardball just as well as Charlie.
 
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