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Cable Operators

Voom Faithful Still Holding Out Hope

2/06/2005 7:00 PM Eastern

Chris Powell had the Voom HDTV satellite service installed at his San Angelo, Texas, home on Jan. 17, just two days before Cablevision Systems Corp. announced a $200 million sale of the satellite assets that make Voom tick to EchoStar Communications Corp.

“I didn’t have any idea Voom would be sold,” said Powell, who found out about the deal by reading a news story on the Internet. “There was nothing really said that indicated that it might go away.”

Powell is one of thousands of customers — many of whom have spent more than $1,000 on Voom hardware — that have been left in limbo because of the EchoStar agreement, which was announced Jan. 20.

IN TRANSITION

Cablevision has said that it will continue to operate Voom during a “transition period” before the transaction between its Rainbow DBS unit and EchoStar closes.

EchoStar isn’t buying Voom customers, last reported at 26,000. Voom continues to accept new orders, but several customers said they are weighing whether to order another cable or satellite HDTV service in anticipation of Voom’s shutdown. Others have already made the switch.

Leesburg, Va., resident Robert Kneuper ordered Voom about six months ago, but kept a cable subscription with Adelphia Communications Corp. to get local channels. After hearing about the Voom sale, Kneuper upgraded to Adelphia’s HDTV service.

Voom hasn’t sent any notification to subscribers about the sale, or a possible shutdown of the service, Kneuper and other customers said.

“We’re sort of hanging out there. Nobody can figure out how Voom can keep going without their satellite. Certainly, some notification would be useful,” said Kneuper, who works as an economist at the Federal Trade Commission.

Cablevision and Voom officials declined to comment on the fate of the Voom customers, including questions regarding whether Cablevision and Voom are obligated to notify customers about the service’s future.

Crutchfield Corp., a Voom retail distributor, recently stopped selling the DBS service. A source said Crutchfield pulled the plug because Rainbow frequently changed the pricing offer for Voom, making it difficult for Crutchfield to pitch the service in its catalogs.

An executive at Voom distributor Sears, who asked not to be identified, said the retailer was continuing to market and sell Voom, and that Sears had not been notified by Rainbow DBS executives of a pending shutdown. BrandsMart USA stores also continue to sell Voom.

The Carmel Group analyst Jimmy Schaeffler estimated Voom’s 26,000 customers could fetch $30 to $40 million in a sale, and said it’s still possible EchoStar could buy them.

He also opined that EchoStar should buy Voom’s original programming assets — the 21 channels created for the service. EchoStar needs original content in order to compete with DirecTV Inc. and major cable operators, the analyst said.

Complaining about a lack of HDTV programming on cable, DirecTV and Dish Network, some Voom customers said they would switch to any platform that bought the Voom programming.

LEMMON IN HD

Beverly Hills, Calif., resident Adriano Aragon said his favorite networks on Voom are movie channels, noting he had just watched an old Jack Lemmon film converted from 35 millimeter film to high-definition.

“It’s as good as going to the cinema,” he said.

Michael Sanchez, who bought Voom for his Sugar Land, Texas, home on Jan. 12, said he wished he had ordered it sooner. “I think it’s a sad day for technology in general,” he said of the Voom sell-off.

Selma, Calif., resident Mike Pointdexter, who has had Voom since the service debuted in late 2003, said he’s not sure what to do with the Voom satellite dish and receiver he bought for about $850.

“It may be a paperweight, or it may have some other use,” he said.

Voom’s remaining assets include the Voom customer base; the original programming services; six orbital slots; and wireless licenses that a Rainbow DBS affiliate acquired in the Federal Communications Commission’s Multichannel Video and Distribution Data Service auction last year.

September