USDTV Pulls the Plug
By Mike Farrell -- Multichannel News, 7/16/2006 8:00:00 PM
Wireless cable-television service provider U.S. Digital Television, with 16,000 subscribers, threw in the towel last week, filing for Chapter 7 liquidation bankruptcy.
USDTV, based in Draper, Utah, used digital-broadcast spectrum to beam its signals to homes in Dallas; Salt Lake City; Albuquerque, N.M..; and Las Vegas. The company offered 30 channels of basic-cable TV for $19.95 per month.
USDTV targeted “cable-never” homes — consumers who had never had cable or satellite television — and cable or direct-broadcast satellite subscribers upset over paying for channels they never watched.
The company leased digital spectrum from television stations in the markets it targeted and sold the service through Wal-Mart Stores locations, select dealers and via the Internet and telephone orders.
According to its Chapter 7 bankruptcy petition, filed July 6 in U.S. Bankruptcy Court in Delaware, USDTV listed estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million.
A Chapter 7 bankruptcy is essentially a liquidation. Unlike a Chapter 11 bankruptcy — which keeps creditors off the bankrupt company’s back as it assembles a reorganization plan — a Chapter 7 liquidation is usually an orderly sale of all of a struggling company’s assets.
USDTV has struggled since its inception in 2003. But in 2005, it got a much-needed capital infusion when a handful of TV-station groups — Fox Television Group, Hearst-Argyle Television, LIN TV, McGraw-Hill Broadcasting, Morgan Murphy Stations and Telecom DTV — agreed to invest a combined $26 million in the company.
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