VOOM Doomed? Or VOOM Still Alive?

[Gregg Lengling]

Late Monday, press releases were flying concerning the fate of VOOM, the troubled satellite TV service backed by Cablevision.

In one statement, Cablevision said it ended discussions with VOOM HD, controlled by Cablevision Chairman Chuck Dolan, without reaching a definitive agreement concerning an acquisition by VOOM HD of parts of the satellite TV business. VOOM HD wanted to buy VOOM assets not included in Cablevision's other sales agreement with EchoStar.

As a result, Cablevision said it will eventually close down the VOOM business, providing service to current customers during a 30-day transition period.

However, VOOM HD released its own statement, saying it's prepared to finance the continued expansion of the satellite TV service. VOOM HD also said it told Cablevision it's interested in completing a transaction on terms and conditions of a letter of intent the two companies agreed upon several weeks ago. The agreement included the purchase of assets and the assumption of liabilities related to the satellite service.

Said Tom Dolan, VOOM HD CEO and son of Chuck Dolan, "We are more than ever convinced of the viability of the VOOM service. We believe our offer to Cablevision is in the best interests of Cablevision's shareholders and VOOM's 46,000 subscribers across the nation. If we are able to complete negotiations with Cablevision, we are certain that VOOM HD will emerge as a robust new vendor providing a valuable alternative to the two services that now dominate the satellite industry."

Meanwhile, the International Bureau at the Federal Communications Commission said it will take comments on the proposed transaction between EchoStar and Cablevision's Rainbow DBS unit, which operates VOOM. Specifically, the FCC will consider requests that include switching Rainbow's authorization for Rainbow 1 at 6l.5 degrees to EchoStar and EchoStar's acquisition of the license to operate an earth station in South Dakota.

The first round of comments are due March 28, with additional comments due to the commission on April 12 and April 18.