News

WSNet Denies Ties to Kamputech

3/02/2003 7:00 PM Eastern

Troubled WSNet Inc., scheduled to shut down service on Feb. 28, has sent a letter to at least some cable customers denying any connection with an upstart satellite company that claims to be ready to take up where it left off.

WSNet provided digital programming and transport services to small and rural cable operators and to about 650,000 customers in apartment buildings.

WSNet filed for Chapter 11 bankruptcy protection on Oct. 24. In a Feb. 10 hearing in U.S. Bankruptcy Court for the Western District of Texas, company lawyers said the plan was to shut down its digital service by March 1.

The company's analog service — primarily a C-band satellite offering to apartment buildings — is in line to be sold.

In bankruptcy court documents, WSNet said it received a written offer for the analog business on Feb. 10, and hoped to have a deal by the end of the month. Ron Hornberger, a bankruptcy court examiner assigned to the case, estimated the analog business should sell for $1.5 million to $2.5 million.

Soon after WSNet announced it would shut its doors, an Eatontown, N.J. computer-networking firm — Kamputech Inc. — said it would restart the digital service for small cable operators and multiple dwelling units across the country.

In a press release issued Feb. 19, Kamputech said it intended to "continue the service on the T-6 and G4R [satellites] to customers currently receiving the service from WSNet. We have received agreements from providers for encoding, uplinking and transmission to customers on the T-6 and G4R satellites, allowing cable operators to offer complete digital programming to regions bypassed by traditional cable systems."

WSNet now denies any agreement with Kamputech.

The letter, signed by WSNet chief operating officer Stuart Lefkowitz, said WSNet had been "notified from public newswires that an entity named Kamputech Inc. has entered into agreements with providers to continue service on T-6 and G4R to its customers. WSNet has not entered into any agreements with Kamputech regarding this proposed transaction. WSNet has not been able to confirm the existence of the agreements necessary to provide continued services as contemplated by Kamputech."

WSNet advised customers to "conduct their normal and customary investigation and due diligence" before selecting a new provider.

In an earlier interview, Kamputech CEO Khalid Adnan said that the company also had agreements with Loral Corp., Motorola Inc. and Comcast Corp.'s Headend in the Sky service for satellite transponder space, equipment and uplink services.

Representatives from those companies denied any agreement had been reached. But they did say they were in discussions with Kamputech.

Sources said last week that in order to obtain the transponder slots on the T-6 and G4R satellites, Kamputech would have to wait until WSNet's agreements for those same slots expire – slated for midnight Feb. 27.

The same sources added that because of the short time frame, Kamputech has informed some small operators that they will not be able to get the service up and running by Feb. 28.

That makes a Kamputech service of little value to most small cable operators who have lost the WSNet service, those same sources said. Waiting even a day for the Kamputech offering wouldn't stop their customers from switching to satellite.

Alpine Cable general manager Pat McGowan said several small operators are trying to get a petition together to ask the bankruptcy court to force WSNet to extend the service for another 30 days. But he saw little chance it would succeed.

"If WSNet is letting all of their people go on the 28th and they're out of money, how is the court going to force them to continue?" McGowan said.

McGowan said Multiband USA — a partnership between Vicom Inc. and Pace Electronics Inc. that plans to provide a comparable service to WSNet — isn't appropriate for his systems because it requires that former WSNet customers switch out their equipment.

"It makes no sense for us," McGowan said.

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