Blonder Tongue Buys Verizon Systems

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Hardware vendor Blonder Tongue Laboratories Inc. has become an operator.

Blonder Tongue said it bought 4,350 multiple-dwelling-unit subscribers from
Verizon Communications through a joint venture it formed with Priority Systems
and Paradigm Capital Ltd.

Most of the MDU systems are in Texas, and some are in Washington, Oregon and
California. The joint-venture company, Priority Systems Group, will pick up the
systems for the bargain price of $575 per subscriber.

It's an unusual deal for Blonder Tongue, which manufactures headend equipment
and other cable hardware. After upgrading the MDU systems with its own hardware,
Blonder Tongue plans to use the Verizon systems as a showcase to pitch its MDU
products to other operators.

Blonder Tongue said the deal is expected to close in September, and the
systems are expected to be cash-flow-positive early next year.

The companies declined to give details on the joint venture, including which
company owns the majority stake.

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