At least two broadcast-related interests are negotiating to secure the assets of USDTV, the two-year old innovative "wireless cable" firm propelled by local broadcasters that filed for Chapter 7 bankruptcy protection on July 6 in Delaware (Petition 06-10701-BLS).
USDTV CEO Steve Lindsley said the maverick start-up, which sought to provide a modest, terrestrially delivered DTV service for $20 monthly, had gleaned a total of about 16,000 subscribers in its four initial markets: Dallas-Ft. Worth, Albuquerque, Las Vegas, and Salt Lake City (its based of operations).
USDTV is being represented in court by Adam G. Landis of Landis Rath & Cobb LLP, of Wilmington, Del, who deferred comment on the matter.
According to court records, Alfred Guilliano, designated as federal bankruptcy court trustee in Delaware, has assumed control of USDTV. Guilliano's attorney, John Carroll of Cozen O'Connor, also of Wilmington, confirmed that as of July 13, two parties were actively negotiating (separately) to possibly assume USDTV's basic assets and at least some debt.
Carroll told TV Technology both interested parties currently are involved in broadcasting. "It depends on how you define 'broadcaster.' It would be in the interest of at least one of the parties to maintain the [16,000] subscribers that the company has already generated in those markets," Carroll said.
Although Carroll confirmed a formal creditors meeting is scheduled in Delaware on Aug. 3, he said he would not be too surprised to see an agreement with one of the negotiating parties well before the August meeting.
USDTV had entered into an array of agreements with a few previously unnamed local broadcasters in the four markets in order to pool a portion of their respective allotments of digital spectrum for terrestrial transmission. Deals also had been inked with manufacturers such as Hisense of China, Tandberg TV, and LG Electronics, to provide subscribers with MPEG-4 set-top boxes and other hardware/software, some of which was being sold by local Wal-Mart outlets.
Both Hisense and Tandberg Television are listed on USDTV's Bankruptcy Notification Certificate (BNC) filed with the court. Also named as creditors or debtors, among others, are: Acme Television of Utah and New Mexico; Entravision; Las Vegas outlets KBLR-TV (Telemundo), KFBT-TV (Sinclair), and KVWB-TV (Sinclair); and Paxson Communications. Seven cable networks are listed on the BNC--including ESPN, Fox News Network, and Discovery Communications. Satellite provider PanAmSat also is noted.
USDTV was soft-launched in 2004 in Salt Lake City amid a brief flurry of industry interest, as a low-cost TV service providing digital content to analog sets. Its prime target was the fading remnants of the "antenna people" and others who could not, or would not, pay for typical cable or DBS services. The typical monthly fee was $20 (well below half of typical cable and DBS bills), with about $65 in start-up expenses.
Lindsley, who had launched an earlier effort similar in concept to USDTV's (which ended with similar results), said his company simply wasn't given enough time and financial backing to achieve its long-range goals. "We had a very positive sign of consumer demand of this product in a very short period of time," he said.
"We only went into the Dallas market last September, and we were on a [course] to sign up 20,000 homes in Dallas within a year," he said. (Dallas sign-ups, to date, are now about 7,000 homes.) About 5,000 subscribers signed on in Salt Lake City. The terrains of the markets, notably Dallas and Las Vegas, were ideally suited to USDTV's terrestrial delivery system.
More than half of USDTV's total subscribers had been "antenna people" and some fall within low-income brackets. Nevertheless, Lindsley said, about 70 percent of his customer base own their own homes and have average median household incomes of $65,000-plus.
