Azteca America, the U.S. subsid of Mexico’s No. 2 web TV Azteca, has extended its Los Angeles carriage with former partner Pappas Telecasting to December 2012.

Reupping comes after a protracted dispute and threats from Pappas to drop Azteca’s programming from its L.A. flagship station KAZA. Pact was to expire in June.

In June, Pappas dropped Azteca America from its stations in Houston; San Francisco/Sacramento; Reno, Nev.; and Omaha, Neb., claiming the web had underperformed. Azteca America has since moved to other local channels in these markets except in Reno and Omaha.

Under the contract, the $129 million payable by Pappas Telecasting to Azteca America has been adjusted and extended.

KAZA is a full-power station that covers the entire Los Angeles television market, including Los Angeles and Orange counties.

As part of the FCC mandate to convert from analog to digital by 2009, Pappas and Azteca America have included in this agreement an option that allows for TuVision, the channel owned and distributed by Pappas Telecasting, to be broadcast in one of KAZA-DT’s secondary digital channels alongside Azteca America’s primary channel as part of a digital package.

Azteca America claims to be the fastest-growing Spanish-language web in the U.S., but still trails in ratings and market share behind Univision, NBC Universal’s Telemundo and Univision sister channel Telefutura.

Azteca America now reaches 89% of the Hispanic households in the U.S., operating in 61 markets nationwide.