USDTV offers cable channels on leased DTV spectrum

Bringing low-cost digital reception and interactivity to analog TV sets has always been a vision of Steve Lindsley, a former president of Bonneville's KSL-TV in Salt Lake City, Utah.

His first attempt came in 2001, when he launched a service called Wow Digital TV during the Winter Olympic Games. Using digital television spectrum provided by local stations in Salt Lake City, a proprietary set top box and a telephone line, participating homes were able to receive digital broadcasts of the Games on their analog TVs, call up data and make purchases. The service did not excite consumers to any large extent and it eventually went out of business.

Lindsley’s back again with another attempt, called U.S. Digital Television (USDTV). While it has already successfully tested the service among a small group of users in Salt Lake City, he’ll officially launch a new package of 11 cable channels and HDTV programs from local terrestrial stations’ digital over-the-air spectrum in February. At the recent CES show, company representatives said that if all went well, the service will be expanded to Las Vegas, Phoenix, Ariz. and eventually as many as 30 markets in the coming years.

The attraction for consumers this time around--only about 300 have signed up so far--is a programming cost of $20 per month, or less than half of what other cable operators in the area are offering, and a set top that costs roughly $99 (as compared to $200 for the Wow Digital TV box). The channel lineup includes four of the top 10 cable networks, such as The Discovery Channel, ESPN, ESPN2, HGTV, Disney, FoodTV, Lifetime, Toon Disney and TLC. The new set-top, to be made by Chinese electronics manufacturer Hisense, can also be used as an ATSC tuner to receive HDTV broadcasts.

The company is currently negotiating with TV-station groups that will lease their excess spectrum to USDTV. Each DTV broadcaster has 19 Mb/s of bandwidth available. After using about 3 Mb/s for a typical SD channel and perhaps another 12 Mb/s for HDTV, a station might have as much as 4 Mb/s to spare. USDTV’s goal is to pool the 4 Mb/s together from several stations in a market to get the space necessary to distribute both SD and HDTV channels.

It’s a risky proposition for stations, who would be tying up their spectrum when they might want to use it for other services in the future. In addition, current FCC rules mandate that the government must share in any revenues gained from multicast channels that are not dedicated to public interest.

However, Lindsley is offering stations revenue based on how many subscribers he signs up, money they currently are not getting from their DTV spectrum.

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