The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Satellite Bahamas and its principals, the Garraway brothers, have agreed to a permanent bar on being able to offer DIRECTV’s programming to clients in the Bahamas and other countries, Tribune Business can reveal.

Court documents obtained by this newspaper confirm that the Mackey Street-based business and its owners have “executed a settlement agreement” with the US’s largest satellite TV broadcaster over allegations that they illegally ‘pirated’ its signal.

Papers filed with the south Florida district court over the past two days include a proposed ‘permanent injunction’, to which Peter and Michael Garraway, and their spouses, have all signed up to.

The injunction stipulates that they, Satellite Bahamas and Garraway Enterprises “shall be and hereby are permanently enjoined and restrained” from receiving, and helping others receive, DIRECTV’s programming outside the US.

They are also barred from “creating, causing to be created, residential or commercial subscription accounts for DIRECTV’s satellite television programming service” outside the US.

Other clauses in the injunction are designed to prevent the Garraways and Satellite Bahamas from activating DIRECTV’s receiving equipment outside the US, and exporting this equipment outside US borders.

They are also blocked from “imitating, copying or making any use of” DIRECTV’s trade marks; claiming they have any approvals from the US satellite broadcaster; and helping others to access its signals outside the US. Any violations by Satellite Bahamas and the Garraways would give the US court “full authority to award damages and other relief” in DIRECTV’s favour.

It is unclear whether the settlement agreement requires the Bahamian company and its principals to pay financial compensation to the US broadcaster, and there is no mention of this in any of the court documents seen by Tribune Business.

But, given that DIRECTV has previously alleged that Satellite Bahamas earned at least $8 .8 million in revenues from the illegal pirating of its signal outside the US, it appears likely that the US broadcaster would demand some reimbursement.

Another unknown is whether this marks the end of Satellite Bahamas, and the Garraways’, involvement in the TV business. At the very least, it appears they will be unable to provide DIRECTV programming to Bahamian residential and commercial clients any more.

However, both they and DIRECTV confirmed their out-of-court settlement to end the Florida litigation. Both sides have promised to file a proposed Order of Dismissal, ending the action, once the Garraways and Satellite Bahamas perform one of the settlement terms by its March 31, 2014, deadline.

In an update to the Florida court, the Bahamian parties and DIRECTV said: “The parties have executed a settlement that is dispositive of all claims in this action...... A proposed Order of Dismissal will be filed [once the court enters the permanent injunction] and defendants’ performance of one of the terms of the parties’ settlement agreement, which performance is due on or before March 31, 2014.”

To get here, the court documents reveal that the Garraways’ wives agreed to be joined to the case, and submit to the Florida court’s jurisdiction. And the injunction’s entry will also see the court strike out the Garraways’ efforts to dismiss DIRECTV’s action as “moot”.

The settlement agreement will likely be a major relief to the Garraway family.

DIRECTV had previously alleged that the Garraways, and Satellite Bahamas, earned at least $8.8 million in revenues from the illegal pirating of its programming signals, which are not supposed to be broadcast outside the US.

Others who will likely be delighted at the prospect of an end to the litigation in the Florida courts will be the 10 Bahamian businesses named by DIRECTV as so-called ‘John Doe’ defendants because it has yet to uncover their names. Such businesses included casinos, hotels and restaurants.

Tribune Business revealed last month how DIRECTV was claiming Satellite Bahamas used more than three times’ the number of accounts initially thought to pirate its signal, with the alleged scheme far more extensive that initially thought.

Its amended lawsuit acknowledged that initial investigations had revealed Satellite Bahamas owned 621 subscriber accounts. These were used to activate 5,803 satellite receivers, which were “exported and sold in the Bahamas”.

DIRECTV, though, then alleged that the claimed scheme, based on information received from Satellite Bahamas - presumably through discovery - was much broader than even it first realised.

“Subsequent to the filing of this action, defendant Satellite Bahamas admitted that between 2001 and 2013, it used 2,043 subscription accounts to provide DIRECTV satellite television programming to its customers,” the US satellite programmer’s latest lawsuit version alleged.

“Upon information and belief, each account was created by defendants using false subscriber names, false service addresses and other false information.

“DIRECTV is continuing to analyse the accounts identified by Satellite Bahamas, and the losses associated with those accounts, but has tentatively determined that 1,032 accounts were used to activate at least 9,099 receivers which, upon information and belief, defendants exported and sold in the Bahamas.”

The Garraways had argued that DIRECTV’s action against them should be dismissed on jurisdictional grounds because they - and Satellite Bahamas - are domiciled in this nation, not the US.

They were arguing that the legislation cited by DIRECTV does not apply to communications activities that took place inside the Bahamas, and that Satellite Bahamas’ website was only a marketing tool to customers within this nation.