Technology

USDTV Gets Cash Infusion

9/26/2005 4:17 AM Eastern

Boosted by a $25.8 million infusion from several broadcasters, U.S. Digital Television Inc. plans to roll out in several new DMAs by the end of the year, officials said Monday.

“We have our spectrum commitments locked up to be able to move forward,” CEO Steve Lindsley said. “We will be launching our markets this year in time for the holidays.”

A group of broadcasters, including Fox Television Stations, is getting a controlling interest in USDTV -- a low-cost wireless-digital-cable service that’s now available in three markets -- in exchange for their investment.

In addition to the News Corp. station unit, Hearst-Argyle Television Inc., McGraw-Hill Broadcasting, LIN TV Corp., Morgan-Murphy Stations and Telcom DTV LLC are part of the group funding USDTV.

“This investment gives us the credibility and the legitimacy now to go forward in a very meaningful way,” Lindsley said. “It’s a great cross-section of industry leaders that are coming together to provide capital to go forward.”

The company’s digital service -- a $20-per-month package of 30 channels that includes 12 cable networks -- is now being tested in Salt Lake City; Albuquerque, N.M.; and Las Vegas. The service -- which debuted in March 2004 -- has 4,500-5,000 subscribers.

With the funding infusion, USDTV plans to roll out its service in several large markets soon and to upgrade it to include video-on-demand and digital-video recorders, according to Lindsley.

USDTV subscribers receive the service through antennas connected to proprietary set-tops. The company -- which has positioned itself as a low-cost alternative to cable -- is able to broadcast its service by leasing spectrum from its TV-station partners in its markets.

But for the past year, USDTV stopped marketing its service to new subscribers as it tried to find additional funding.

“That’s what’s obviously so invigorating to the team now, to be able to finally have the cash to be able to move forward,” Lindsley said.

In the next few weeks, USDTV will announce what its pricing and packaging will be going forward and which new DMAs it will offer its service in, according to Lindsley.

March