Broadweave buying Houston FTTP network

A Texas bankruptcy court on Wednesday is expected to approve the sale of Eagle Broadband’s IPTV business to Canadian carrier Interworld Telecommunications and the sale of its Houston-area fiber-to-the-premises (FTTP) network to Broadweave Networks.

Eagle, which filed for Chapter 11 bankruptcy last fall, three weeks ago submitted a plan to sell its Miami-based IPTV business to Interworld for $700,000 and its fiber network, which spans five Houston neighborhoods, to Broadweave for $280,000, or $245,000 after commissions are paid.

As of last November, according to Eagle’s court filings, the fiber network had a “book value” of more than $2 million. The video headend in Miami is worth nearly $1.2 million, Eagle said.

“I’m unaware of any objections to this motion as of today, and so my expectation is that this sale will proceed upon court approval of the pending motion,” Brian Morrow, Eagle’s chief operating officer, told Telephony in an email today, adding that the motion will be heard on Wednesday, July 16.

David Micek, Eagle’s CEO since 2005, will receive a commission of $56,000 for selling the IPTV business and $28,000 for selling the fiber network. That aside, the entirety of the proceeds of the fiber sale will go toward paying down more than $3.3 million in unpaid Texas sales taxes and associated interest, some of which Eagle has disputed.

Broadweave was not immediately available for comment. Two months ago, the Utah-based competitive local exchange carrier acquired the municipal FTTP network in Provo, Utah, for nearly $41 million, planning to convert its wholesale model to a retail one. The company has also targeted master planned communities in Arizona, California, Nevada and New Mexico.

The assets Broadweave is buying from Eagle include all equipment in the field and distribution enclosures but not a head office, Morrow said, estimating that the network connects to “several thousand” homes but is not currently delivering service.

Eagle tried to sell its Houston network early last year to triple-play provider Optical Entertainment Network for $200,000 cash and a $1.7-million loan. But tax battles between OEN and its home state of Texas prevented the deal from closing, and OEN leased the network to deliver services to a few hundred subscribers before abruptly halting operations just weeks before Eagle declared bankruptcy. According to insiders, OEN was hobbled by internal technology debates following a decision to roll out an active Ethernet architecture.

After several years selling equipment and software related to pagers, Eagle entered the bundled telecom services business in 2003, a string of acquisitions already under its wing. The company declared bankruptcy last November, after its former chairman, H. Dean Cubley, submitted an asset seizure order to Eagle’s primary bank, having sued the company a year earlier seeking repayment of a nearly $2-million loan from 2003. Seven months later, Cubley won his money back, plus interest and legal fees, in court.

Earlier this year, Eagle sold its project management group -- which handled telecom-related equipment installation for Sprint as well as hotels and retailers -- to GB Tech for $105,000.

The company is still searching for a buyer for its satellite services business, which centers around a contract with HughesNet to install satellite dishes and broadband gear throughout Texas and Louisiana and on offshore oil rigs in the Gulf of Mexico.