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.
