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                                                                   EXHIBIT 3.7







                     CERTIFICATE OF DESIGNATION, PREFERENCES
                                   AND RIGHTS

                                       OF

            SERIES E JUNIOR CONVERTIBLE PARTICIPATING PREFERRED STOCK

                                       of

                       PEGASUS COMMUNICATIONS CORPORATION


                  Pegasus Communications Corporation, a corporation organized
and existing under the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY THAT, pursuant to authority conferred upon
the Board of Directors by the Amended and Restated Certificate of Incorporation
of the Corporation, as amended (the "Certificate of Incorporation"), and
pursuant to the provisions of Section 151 of Title 8 of the Delaware Code, a
duly constituted committee of the Board of Directors, pursuant to unanimous
written consent dated February 14, 2000, adopted the following resolutions
providing for the designations, preferences and relative, participating,
optional and other rights, and the qualifications, limitations and restrictions
of the Series E Junior Convertible Participating Preferred Stock:

                  RESOLVED, that pursuant to the Corporation's Certificate of
Incorporation there is hereby established a series of Preferred Stock, the
distinctive serial designation of which shall be "Series E Junior Convertible
Participating Preferred Stock," par value $0.01 per share.

                  FURTHER RESOLVED, that the proper officers of this Corporation
are hereby authorized and directed to execute and file on behalf of the
Corporation such certificate or statement, or certificates or statements
required to effectuate the foregoing resolutions under Delaware law and to take
such other actions as they consider necessary or appropriate to carry out the
foregoing resolutions.

                  FURTHER RESOLVED, that the voting rights, preferences,
limitations, and special rights of the Series E Junior Convertible Participating
Preferred Stock not set forth in the Corporation's Certificate of Incorporation
shall be as follows:

                  1. Designation of Series. The distinctive serial designation
of this series shall be "Series E Junior Convertible Participating Preferred
Stock" (herein referred to as the "Series E Preferred Stock"). Each share of
Series E Preferred Stock shall be identical in all respects with the other
shares of Series E Preferred Stock.

                  2. Number of Shares. The number of shares of Series E
Preferred Stock shall be 10,000.
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                  3. Dividends. Subject to the prior and superior rights of the
holders of Senior Stock, the holders of shares of Series E Preferred Stock shall
be entitled to receive, when and as declared by the Board of Directors of the
Corporation out of funds legally available for such purpose, dividends at the
rate of 4% of the outstanding liquidation preference per share per annum, and no
more, payable annually on January 1 , commencing on January 1, 2001. Dividends
on the Series E Preferred Stock shall be cumulative and shall accrue from the
date of the original issuance of the Series E Preferred Stock. At the
Corporation's option, dividends shall be payable in cash or in the number of
shares of the Class A Common Stock that can be purchased at the Market Price at
the time the applicable cash dividend is due.

                  In no event, so long as any Series E Preferred Stock shall
remain outstanding, shall any dividend whatsoever be declared or paid upon, nor
shall any distribution be made upon, any Junior Stock, nor (without the written
consent of the holders of a majority of the outstanding Series E Preferred
Stock) shall any shares of Junior Stock be purchased or redeemed by the
Corporation, nor shall any moneys be paid to or made available for a sinking
fund for the purchase or redemption of any Junior Stock, unless in each instance
dividends on all outstanding shares of the Series E Preferred Stock for all past
dividend periods shall have been paid and any arrears in the mandatory
redemption of the Preferred Stock shall have been made good.

                  4. Liquidation Rights.

                  (a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
Series E Preferred Stock shall be entitled, after the payment of all amounts
payable to the holders of Senior Stock, and before any distribution or payment
is made to the holders of any Junior Stock, to be paid in full the Liquidation
Preference of each share of Series E Preferred Stock.

                  (b) If, upon such liquidation, dissolution or winding up, the
amounts available for distribution to the holders of Series E Preferred Stock
and all Parity Stock shall be insufficient to permit the payment in full to such
holders of the preferential amounts to which they are entitled, then such
amounts shall be paid ratably among the shares of Series E Preferred Stock and
Parity Stock in accordance with the respective preferential amounts (including
unpaid cumulative dividends on such Parity Stock) payable with respect thereto,
if paid in full.

                  (c) If payment of the Liquidation Preference on liquidation,
dissolution or winding up of the affairs of the Corporation shall have been made
in full to the holders of all shares of Series E Preferred Stock, all Parity
Stock, and all Junior Stock (other than Common Stock), the remaining assets of
the Corporation shall be distributed, first, to the holders of Common Stock in
an amount equal to the amount paid on the Series E Preferred Stock pursuant to
subparagraph 4(a) and any amounts paid on any other class or series of
Participating Stock, and second, among the holders of Common Stock, the Series E
Preferred Stock and any other Participating Stock in accordance with the number
of shares of Common Stock outstanding, assuming, for purposes of this clause
second only, that (1) all shares of Class A Common Stock then issuable upon
conversion of the Series E Preferred Stock are outstanding and held by the
holders of the Series E Preferred Stock and (2) all shares of Common Stock then
issuable upon the conversion of any other Participating Stock are outstanding
and held by the holders thereof.

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                  (d) For purposes of this Section 4, the consolidation or
merger of the Corporation with or into any other corporation, the conveyance or
transfer of the property and assets of the Corporation as, or substantially as,
an entirety, or the reclassification of the capital stock of the Corporation or
the redemption or purchase of less than all of the shares of the capital stock
of the Corporation, shall not be deemed to constitute a liquidation, dissolution
or winding up of the Corporation.

                  5. Redemption.

                  (a) Redemption at Option of Corporation. The Corporation may
redeem all (but not less than all, without the consent of all holders of Series
E Preferred Stock) of the outstanding shares of Series E Preferred Stock (1) at
any time up until the first anniversary of issuance, at the Accelerated
Redemption Price, and (2) at any time thereafter, at a price per share equal to
the Redemption Price. Notice of every redemption of shares of Series E Preferred
Stock at the option of the Corporation shall be mailed by first class mail,
postage prepaid, addressed to the holders of record of the shares to be redeemed
at their respective last addresses as they shall appear on the books of the
Corporation. Such mailing shall be made at least 30 days prior to the Redemption
Date. The notice of redemption shall state: (1) the Redemption Date; (2) the
amount of the Accelerated Redemption Price or the Redemption Price, as
applicable; (3) that on the Redemption Date the Accelerated Redemption Price or
the Redemption Price, as applicable, will become due and payable upon surrender
of certificates representing each share of Series E Preferred Stock; and (4) the
place or places where certificates representing shares of Series E Preferred
Stock to be redeemed are to be surrendered for payment of the Accelerated
Redemption Price or the Redemption Price, as applicable. Notwithstanding the
foregoing, any holder of Series E Preferred Stock shall have the right, after
receiving notice of the Corporation's intention to redeem, to convert the Series
E Preferred Stock, as provided in Section 6, upon serving written notice of such
election no later than five business days prior to the Corporation's proposed
redemption.

                  (b) Redemption at Option of Holders. Except as provided in the
next sentence, the holders of all outstanding shares of Series E Preferred Stock
shall have the right to require the Corporation to redeem 5,000 of the
outstanding shares of Series E Preferred Stock, at a price per share equal to
the Redemption Price, by providing written notice of redemption to the
Corporation on any day after February 25, 2002, redeem the remaining 5,000 of
the outstanding shares of Series E Preferred Stock beginning on February 25,
2003. Notwithstanding the preceding sentence, the Corporation shall have no
obligation to redeem any of the Series E Preferred Stock unless it is able at
the time to do so in compliance with: (1) Section 8(a) of the Certificate of
Designation, Preferences and Relative, Participating, Optional and Other Special
Rights of Preferred Stock and Qualifications, Limitations and Restrictions
Thereof of the Corporation's 12.75% Series A Cumulative Exchangeable Preferred
Stock, (2) Section 2(C) of the Certificate of Designation, Preferences and
Relative, Participating, Optional and Other Special Rights of Preferred Stock
and the Qualifications, Limitations and Restrictions Thereof of the 6 1/2%
Series C Convertible Preferred Stock of the Corporation, (3) Section 4.07 of the
Indenture dated as of October 21, 1997, between the Corporation and First Union
National Bank as trustee, (4) Section 4.07 of the Indenture dated as of November
30, 1998, between the Corporation and First Union National Bank, as trustee, (5)
Section 4.09 of the Indenture dated as of November 19, 1999, between the

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Corporation and First Union National Bank, as trustee, and (6) any similar or
comparable provision, now or hereafter in effect, in the terms of any Preferred
Stock of the Corporation or any indenture, note, bond, debenture or other
agreement or instrument pursuant to which the Corporation has issued securities
or borrowed money. Notice of every redemption of shares of Series E Preferred
Stock at the option of the holders shall be mailed by first class mail, postage
prepaid, addressed to the Corporation at its principal office. Such mailing
shall be at least 30 days and not more than 60 days prior to the Redemption Date
and shall state the Redemption Date and the amount of the Redemption Price.

                  (c) Payment of Redemption Price; Deposit of Funds. In the case
of any redemption under subsection (a) or (b), the Corporation shall pay to the
holders of the Series E Preferred Stock, on or before the Redemption Date, the
full amount of the Redemption Price upon surrender by such holders of
certificates representing the shares of Series E Preferred Stock being redeemed.
The Corporation may elect to effect any such redemption by depositing with the
bank or trust company hereinafter mentioned (and, in the case of a redemption
under subsection (a), may irrevocably authorize such bank or trust company to
give the notice of redemption) the funds necessary for such redemption in trust
for the pro rata benefit of the holders of the shares called for redemption,
whereupon, notwithstanding that any certificates for shares so called for
redemption shall not have been surrendered for cancellation, from and after the
Redemption Date, all shares so called for redemption shall no longer be deemed
to be outstanding and all rights with respect to such shares shall forthwith
cease and terminate, except only the right of the holders thereof to receive
from such bank or trust company at any time after the time of such deposit the
full amount of the Redemption Price, without interest. Upon surrender to the
Corporation or to such bank or trust company by any holder of either (i) the
certificates representing the shares of the Series E Preferred Stock being
redeemed; or (ii) a lost share affidavit in a form satisfactory to the
Corporation and such bank or trust company, together with an indemnity bond the
amount, terms, form and issuer of which are reasonably satisfactory to the
Corporation and such bank or trust company with respect to any certificate which
has been lost or destroyed, the bank or trust company shall promptly pay to such
holder the full amount of the redemption price being redeemed by such holder.
Any interest accrued on such funds shall be paid to the Corporation from time to
time. The aforesaid bank or trust company shall be organized and in good
standing under the laws of the United States of America or any state thereof,
shall be doing business in the United Shares of America, shall have capital,
surplus and undivided profits aggregating at least $10,000,000 according to its
last published statement of condition, and shall be identified in the notice of
redemption. Any funds so set aside or deposited, as the case may be, and
unclaimed at the end of two years from such Redemption Date shall, to the extent
permitted by law, be released or repaid to the Corporation, after which
repayment the holders of the shares so called for redemption shall look only to
the Corporation for payment thereof.

                  (d) Status of Redeemed Series E Preferred Stock. Shares of
Series E Preferred Stock which are redeemed shall be restored to the status of
authorized but unissued shares of Preferred Stock undesignated as to series.

                  6. Conversion.

                  (a) Right to Convert. Subject to the terms and conditions of
this Section 6, the holder of any share or shares of Series E Preferred Stock

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shall have the right, at its option at any time, to convert any such shares of
Series E Preferred Stock (except that upon any liquidation of the Corporation
the right of conversion shall terminate at the close of business on the last
full business day next preceding the date fixed for payment of the amount
distributable on the Series E Preferred Stock) into such number of fully paid
and nonassessable whole shares of Class A Common Stock as is obtained by
dividing $1,000 by the Conversion Price. Such rights of conversion shall be
exercised by the holder thereof by giving written notice that the holder elects
to convert a stated number of shares of Series E Preferred Stock into Class A
Common Stock and by surrender of a certificate or certificates for the shares so
to be converted to the Corporation at its principal office (or such other office
or agency of the Corporation as the Corporation may designate by notice in
writing to the holders of the Series E Preferred Stock) at any time during its
usual business hours on the date set forth in such notice, together with a
statement of the name or names (with address) in which the certificate or
certificates for shares of Class A Common Stock shall be issued.

                  (b) Issuance of Certificates; Time Conversion Effected.
Promptly after the receipt of the written notice referred to in Section 6(a) and
surrender of the certificate or certificates for the share or shares of Series E
Preferred Stock to be converted, the Corporation shall issue and deliver, or
cause to be issued and delivered, to the holder, registered in such name or
names as such holder may direct, a certificate or certificates for the number of
whole shares of Class A Common Stock issuable upon the conversion of such share
or shares of Series E Preferred Stock. To the extent permitted by law, such
conversion shall be deemed to have been effected and the Conversion Price shall
be determined as of the close of business on the date on which such written
notice shall have been received by the Corporation and the certificate or
certificates for such share or shares shall have been surrendered as aforesaid,
and at such time the rights of the holder of such share or shares of Series E
Preferred Stock shall cease, and the person or persons in whose name or names
any certificate or certificates for shares of Class A Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby.

                  (c) Fractional Shares; Dividends; Partial Conversion. No
fractional shares shall be issued upon conversion of Series E Preferred Stock
into Class A Common Stock and no payment or adjustment shall be made upon any
conversion on account of any cash dividends on the Class A Common Stock issued
upon such conversion. At the time of each conversion, the Corporation shall pay
in cash an amount equal to all dividends accumulated and unpaid on the shares
surrendered for conversion to the date upon which such conversion is deemed to
take place as provided in Section 6(b). In case the number of shares of Series E
Preferred Stock represented by the certificate or certificates surrendered
pursuant to Section 6(a) exceeds the number of shares converted, the Corporation
shall, upon such conversion, execute and deliver to the holder thereof, at the
expense of the Corporation, a new certificate or certificates for the number of
shares of Series E Preferred Stock represented by the certificate or
certificates surrendered which are not to be converted. If any fractional
interest in a share of Class A Common Stock would, except for the provisions of
the first sentence of this Section 6(c), be delivered upon any such conversion,
the Corporation, in lieu of delivering the fractional share thereof, shall pay
to the holder surrendering the Series E Preferred Stock for conversion an amount
in cash equal to the current market price of such fractional interest as
determined in good faith by the Board of Directors of the Corporation.

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                  (d) Adjustment for Change in Capital Stock. If at any time
after the date hereof, the Corporation:

                  (1) pays a dividend or makes a distribution on its Class A
Common Stock in shares of its Class A Common Stock;

                  (2) subdivides its outstanding shares of Class A Common Stock
into a greater number of shares;

                  (3) combines its outstanding shares of Class A Common Stock
into a smaller number of shares;

                  (4) makes a distribution on its Class A Common Stock in shares
of its capital stock other than Class A Common Stock; or

                  (5) issues by reclassification of its Class A Common Stock any
shares of its capital stock;

then the number of shares of Class A Common Stock receivable upon conversion of
the Series E Preferred Stock and the Conversion Price, as in effect immediately
prior to such action, shall be adjusted so that the holders may receive upon
conversion of the Series E Preferred Stock and payment of the same aggregate
Conversion Price the number of shares of capital stock of the Corporation which
the holders would have owned immediately following such action if the holders
had converted the Series E Preferred Stock immediately prior to such action. The
adjustment shall become effective immediately after the record date in the case
of a dividend or distribution and immediately after the effective date in the
case of a subdivision, combination or reclassification.

                  (e) Notice to Holders upon Certain Events. In the event that:

                  (1) the Corporation shall authorize the issuance to holders of
its Class A Common Stock of rights, warrants, options or convertible securities
to subscribe for or purchase shares of its Class A Common Stock or of any other
subscription rights, warrants, options or convertible securities; or

                  (2) the Corporation shall authorize the distribution to
holders of its Class A Common Stock of evidences of its indebtedness or assets;
or

                  (3) the Corporation is the subject of a voluntary or
involuntary dissolution, liquidation or winding-up proceeding;

then the Corporation shall cause to be mailed by first-class mail to the holders
of the Corporation's Series E Preferred Stock, at least ten (10) days prior to
the applicable record or effective date, a notice stating (A) the date as of
which the holders of Class A Common Stock of record to be entitled to receive
any such rights, warrants, options or convertible securities or distributions
referred to in clauses (1) and (2) above are to be determined, or (B) the date
on which any such dissolution, liquidation or winding-up referred to in clause
(3) above is expected to become effective, and the date as of which it is

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expected that holders of Common Stock of record will be entitled to exchange
their shares of Class A Common Stock for securities or other property, if any,
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding-up.

                  (f) Reclassification, Reorganization, Consolidation or Merger.
In the event of any reclassification, capital reorganization or other change of
outstanding shares of Class A Common Stock of the Corporation (other than a
subdivision or combination of the outstanding Class A Common Stock and other
than a change in the par value of the Class A Common Stock) or in the event of
any consolidation or merger of the Corporation with or into another corporation
or a non-corporate entity (other than a merger in which the Corporation is the
continuing corporation and that does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock) or in the
event of any sale, lease, transfer or conveyance to another corporation or
non-corporate entity of the property and assets of the Corporation as an
entirety or substantially as an entirety, the Corporation shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
holders of the Corporation's Series E Preferred Stock shall have the right
thereafter, by converting the Series E Preferred Stock, to purchase the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Class A Common Stock that might have been received upon conversion of the Series
E Preferred Stock immediately prior to such reclassification, capital
reorganization, change, consolidation, merger, sale or conveyance. The foregoing
provisions of this Section shall similarly apply to successive reclassification,
capital reorganizations and changes of shares of Class A Common Stock and to
successive consolidations, mergers, sales or conveyances.

                  (g) Stock to be Reserved. The Corporation shall at all times
reserve and keep available out of its authorized Class A Common Stock or its
treasury shares, solely for the purpose of issuance upon the conversion of the
Series E Preferred Stock as herein provided, such number of shares of Class A
Common Stock as shall then be issuable upon the conversion of all outstanding
shares of Series E Preferred Stock. The Corporation covenants that all shares of
Class A Common Stock which shall be so issued shall be duly and validly issued
and fully paid and nonassessable.

                  7. Voting Rights.

                  (a) Except as otherwise required by law, the holders of Series
E Preferred Stock shall have no right to vote on any matter to be voted on by
the stockholders of the Corporation. Without limiting the generality of the
foregoing, the Corporation may authorize, issue or amend the terms of Senior
Stock, Parity Stock or Junior Stock, or may increase or decrease the number of
authorized shares of Preferred Stock, Series E Preferred Stock, Senior Stock,
Parity Stock or Junior Stock, without the vote or consent of any holder of
Series E Preferred Stock.

                  (b) In any matter upon which the holders of the Series E
Preferred Stock shall be entitled by law to vote, the holders of Series E
Preferred Stock shall be entitled to one vote per share, and shall not be
entitled to vote as a separate class or series unless otherwise required by law.

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                  8. Definitions. As used herein, the following terms have the
following meanings:

                  The "Accelerated Redemption Price" per share of Series E
Preferred Stocks means $1,100 plus accumulated and unpaid dividends.

                  "Class A Common Stock" means the Class A Common Stock of the
Corporation, par value $0.01.

                  "Common Stock" means stock of any class of the Corporation
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation and which is not subject to redemption by the Corporation.

                  "Conversion Price" means $124.70834 per share or, in case an
adjustment of such price shall have taken place pursuant to the provisions of
Section 6, then the such price as last adjusted and in effect at the date any
share or shares of Series E Preferred Stock are surrendered for conversion.

                  "Junior Stock" means the Common Stock and all other stock of
the Corporation hereafter authorized, issues or outstanding that by its terms
ranks junior to Series E Preferred Stock in whole or in part as to distribution
of assets upon liquidation.

                  The "Liquidation Preference" per share of Series E Preferred
Stock means $1,000 plus accumulated and unpaid dividends.

                  "Parity Stock" means all stock of the Corporation hereafter
authorized, issued or outstanding other than Senior Stock and Junior Stock.

                  "Participating Stock" means any stock of the Corporation
hereafter authorized that participates with the Common Stock as to distribution
of assets upon liquidation on terms similar to those in subparagraph 4(c).

                  "Redemption Date" means the date on which Series E Preferred
Stock is to be redeemed and the Redemption Price paid in accordance herewith.

                  The "Redemption Price" per share of Series E Preferred Stock
means $1,000 plus accumulated and unpaid dividends.

                  "Senior Stock" means the 12.75% Series A Cumulative
Exchangeable Preferred Stock of the Corporation, the 6 1/2 % Series C
Convertible Preferred Stock of the Corporation and all other stock of the
Corporation hereafter authorized, issued or outstanding that by its terms ranks
senior to the Series E Preferred Stock in whole or in part as to distribution of
assets upon liquidation.

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                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate this 25th day of February, 2000.

                                PEGASUS COMMUNICATIONS CORPORATION



                                By: /s/ Ted S. Lodge
                                   -------------------------------------
                                       Ted S. Lodge
                                       Senior Vice President


























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