multichannel connect
careers
all access

Finance

Layoffs Hit OMGFast: Report

Workforce Reduction Comes Eight Months after Cablevision Agreed to Sell MVDDS Licenses to Dish 6/30/2013 8:08 AM Eastern

OMGFast, the Cablevision Systems-backed provider of fixed wireless broadband services, laid off an undisclosed number of employees at its headquarters in Pompano Beach, Fla., last Thursday (June 20), according to the South Florida Business Journal.

OMGFast delivers Internet speeds up to 50 Mbps in Florida’s Broward and Palm Beach counties using Multichannel Video and Data Distribution (MVDDS) spectrum to deliver Internet speeds of up to 50 Mbps in Florida’s Broward and Palm Beach counties. OMGFast is delivering those fix broadband services using gear installed on area cell towers.

Cablevision declined to comment on the report, but the purported layoff comes about eight months after the MSO agreed to sell its 500MHz of MVDDS licensed covering 150 million people in 45 metro U.S. areas, including New York, Los Angeles and Boston, to Dish Network for $80 million as part of a $700 million settlement of a legal battle linked to the defunct Voom HD service.

A person familiar with the situation said the layoff affected sales and general office staff, noting that OMGFast is shifting customer service calls to a contractor.

Cablevision has not launched OMGFast beyond South Florida, where it has used Hall of Fame NFL quarterback Joe Namath and daughter, Jessica, to pitch the service.  Comcast and AT&T are among the primary broadband ISPs that compete in the market with OMGfast.

In February, OMGFast announced a lifetime price of $29.95 per month as it expanded service to another 23,000 homes in Broward County. At the time, a spokeswoman told this reporter that OMGFast had signed up more than 3,000 customers. The regular price of its uncapped, 50-Meg service is $59.99 per month. To play up the service’s over-the-top video capabilities, OMGFast is also offering a Roku or Apple TV box for $5 per month.

The same source, who requested anonymity, said OMGfast had been making plans to expand "significantly" and that towers were just set up to serve cities such as Miramar, Ft. Lauderdale, and Plantation.

Last October, when the Dish-Cablevision settlement was announced, Craig Moffett, then an analyst with Sanford C. Bernstein (he has since started his own firm, Moffett Research), suggested in a research note that OMGFast was developed merely to “meet minimum buildout requirements associated with the licenses, and did not signal an intent to overbuild its cable peers.” Cablevision originally acquired the MVDDS licenses in a 2004 FCC auction via a subsidiary, with a requirement that it develop a “substantial service” using that spectrum by September 2014.

The paper reported last week that OMGFast had about 60 employees based at its headquarters last year, and cited unnamed sources saying that the OMGFast service is expected to continue.

September