Exhibit 10.7

Pegasus Communications Corporation 2005 Short-Term Incentive Plan (Corporate and
Broadband)

     The 2005 Short-Term Incentive Plan (the “Plan”) of Pegasus Communications
Corporation (the “Company”) is designed to align business, stockholder, and
Participant interests, provide competitive compensation, and reward performance
based on business achievements.

     In line with its purpose, participation in the Plan is accordingly
restricted to those full-time employees of the Company or its business units who
are in Management positions. To be entitled to payments under the terms of this
Plan, employees must be employed by the Company and/or business unit at the time
of payment.

     Employees who were hired by the Company or any of its business units after
the start of the plan year, or who were promoted to a position eligible for Plan
participation after the start of the plan year, may be designated Participants
and be eligible as of their hire or promotion date.

     To be eligible for a payout, a Plan Participant must have satisfactory
performance. If a participant is on a formal written warning, they are not
eligible to receive a monthly incentive for 30 days from the date of the written
warning and continued eligibility will be re-evaluated at the end of the 30
days. A Participant will be disqualified from Plan participation for acts of
misconduct, including, but not limited to, falsification of records,
manipulation of accounts, violation of policy, or other misconduct determined
sufficient for disqualification.

     This Plan shall be administered by a committee appointed by the Chief
Executive Officer of the Company (the “Committee”), which committee may consist
of or include the Chief Executive Officer. This Committee shall be empowered to
designate Plan Participants for the plan year, to determine target incentive
award opportunities for each Participant, to establish performance standards for
the Company and/or business units, and to determine whether a Plan Participant's
performance is satisfactory. Following the end of the plan year, the Committee
will measure the achievements of the overall Company or unit, as applicable, and
determine the performance award payments earned by each Plan Participant. All
determinations made by the Committee under the Plan shall be final and binding
on the Participants, the Company, and any other parties.

     Each Plan Participant shall be assigned a short-term incentive target award
opportunity which shall be expressed as a percentage of the Participant's annual
base salary for the plan year (or for the portion of the year during which the
employee participates in the Plan). Incentive percentages are established for
each management level (e.g., manager, director, vice president, etc.) and are
designed to reflect competitive incentive levels using market data and job
responsibilities as a guide. Executive officers will have their incentive
percentages established by the Company’s Compensation Committee or, in the
absence of a compensation committee, by the Board of Directors of the Company or
a committee established by the Board of Directors for this purpose.

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     Payout is based upon achievement of business goals established and
circulated to Plan Participants for a plan year. For 2005, business performance
goals will be based on the following five criteria: households passed, ending
subscribers, business revenue, VoIP revenue, and pre-marketing cash flow. Each
of the five criteria is weighted equally and counts as 20% of the performance
goals.

     The Committee shall have the right to adjust payouts in the event of
significant windfalls, shortfalls, or other economic factors which are beyond
the Participant's control. Short-term incentive Payouts will be made as soon as
practical after performance is known and will be made in cash.

     For calendar year 2005, unless the Committee otherwise specifies, payouts
will be based upon Participant's annual base salary as in effect on July 1, 2005
(or such later date that an employee becomes a Plan Participant).

     Nothing in this Plan shall be construed as guaranteeing any Participant any
rights to continued employment with the Company or any of its business units,
any rights to award payments with respect to any year in which the employee has
been designated a Plan Participant, or any rights to continued Plan
participation in subsequent years unless the Committee shall expressly designate
the employee a Plan Participant in such subsequent years. In order to receive an
award payment, a Participant must have been in the continuous full-time employ
of the Company or a participating business unit for the entire period since
first being designated a Plan Participant by the Committee, must be employed at
the time of payment, and must have satisfactory performance.

     A Participant whose employment terminates for any reason other than death,
permanent disability, or retirement will receive no incentive payments
(including payments earned but not yet paid). A Participant whose employment
terminates due to death, permanent disability, or retirement may, at the
discretion of the Committee, receive payment of any incentive payments earned to
the date of such termination (based on compensation through the date of
termination). If a Participant dies prior to receiving his or her earned
incentive, the Participant's spouse, or, in the case of an unmarried
Participant, the Participant's estate, will be paid the employee's earned
incentive payments.

     Participants who are promoted, reassigned or otherwise transferred during a
calendar year will receive payout based upon (i) the length of time in each
eligible position, (ii) the base salary for each eligible position, and (iii)
the target percentage determined for each eligible position.

     The Plan is governed by the laws of the Commonwealth of Pennsylvania,
except to the extent that federal law may apply.

     The Plan became effective for the plan year commencing on July 1, 2005 and
shall continue in effect until December 31, 2005, unless it shall be extended by
the Committee. The Committee shall be empowered to amend or terminate the Plan
at anytime (including prior to payout of an award with respect to a year) and
for any reason.

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