USDTV Signs Agreement with Major Broadcasters to Expand ''Over-the-Air'' Digital Subscription TV

Fox, Hearst-Argyle, McGraw-Hill Broadcasting, LIN TV, Morgan-Murphy stations and Telcom DTV invest in USDTV's low-cost digital alternative to cable.
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U.S. Digital Television (USDTV) signed a $25.75 million funding agreement with an investment group that includes Fox Television Stations, Inc., Hearst-Argyle Television, Inc., McGraw-Hill Broadcasting, LIN TV Corp., Morgan-Murphy Stations and Telcom DTV, LLC, providing additional financial and strategic support to expand its low cost, all-digital, "over-the-air" alternative to cable.

"We are pleased with the wide range of industry leaders supporting USDTV's efforts to provide consumers with a new choice for digital television," said Steve Lindsley, Chief Executive Officer of USDTV. "The vision and strategic strength of our new investors significantly enhance our ability to change the competitive landscape of the subscription TV industry."

For less than $20 a month, USDTV offers consumers approximately 30 all digital channels, comprising local digital and HDTV broadcast channels and 12 leading cable networks, including FOX News Channel, ESPN and The Disney Channel.

Consumers receive the USDTV service through a VHF/UHF antenna connected to a proprietary USDTV set-top box, producing digital quality picture and sound on standard TVs. USDTV is able to broadcast its service by leasing spectrum from its television station partners in each market.

"USDTV delivers a competitive consumer offering and has developed a dynamic business model that will help monetize our stations' digital spectrum," said Jack Abernethy, CEO of Fox Television Stations, Inc. "In addition to those viewers who use traditional TV antennas, I believe there are millions of expanded and basic cable homes who will be attracted to USDTV's low-cost service."

The service is currently being tested in three pilot markets: Salt Lake City, Albuquerque and Las Vegas, with other markets expected to launch in the coming months. Planned technology upgrades include the introduction of video on-demand (VOD) content and digital video recording (DVR) services.

"The need for expanded consumer options in the pay TV industry is just one driver of the investment promise behind the company," said Steve Hobbs, Senior Vice President, Hearst-Argyle Television, Inc.

"We believe broadcasters will unite around the USDTV initiative and reaffirm their leadership role in the communities they serve," said Gary Chapman, Chairman, President and Chief Executive Officer of LIN TV Corporation.
The USDTV service, including USDTV compatible set-top boxes, will be available directly from USDTV and through national and local retailers.