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USDTV's four-year effort to use broadcast spectrum as a low-cost competitor to cable and satellite television has apparently failed.

USDigital, the company behind the wireless pay television service, last week announced that it was closing down operations due to a funding withdrawal from its major investor, Denver-based NexGen Telecom.

The shutdown eliminates the jobs of 10 USDTV employees and affects about 4000 subscribers in Salt Lake City, Dallas/Fort Worth, Albuquerque and Las Vegas.

The company said it made arrangements with a third-party installation company to convert the USDTV set-top box so that it will continue to receive free over-the-air local digital and high-definition TV channels without the USDTV service. Customers may also opt to return the receiver to the company.

Launched in late 2005, USDTV leased portions of the digital spectrum from local television stations. Customers with a set-top box and antenna received about 30 channels of off-air wireless digital TV service for $19.95 per month.

USDigital was initially funded by a group of media companies, but filed for Chapter 7 bankruptcy the summer of 2006. The company was purchased out of bankruptcy by NexGen and later rehired its management team and about 50 employees.