Sezmi Corp. is rolling out a "pilot" version of its overdue wireless cable service in Los Angeles over the next several months, using spectrum leased from four TV stations.

During the pilot, the startup will offer the service without charge to as many as 1,000 consumers so that it can refine the marketing and introduce the commercial service in Los Angeles in the first quarter of 2010 and eventually in other markets around the country.

"The purpose is to bring consumers into the service, understand their experience and scale up in the first quarter of next year," says Sezmi President Phil Wiser.

Sezmi is running behind schedule. In June 2008, it said it hoped to offer commercial service by the end of that year. However, it did conduct at least one extensive technical trial of the service in 2008 in Seattle, working with three broadcasters there — Fisher, Tribune and Daystar.

Intended as a low-cost alternative to cable and satellite TV, Sezmi combines online video and video-on-demand offerings with local TV station signals and popular cable networks distributed over excess digital spectrum leased from broadcasters.

Bringing it all together is a proprietary set-top box with a high-capacity DVR that plugs into a broadband connection and a "smart" indoor broadcast antenna. The box provides an interface for accessing the offerings that can be customized and personalized.

For the Los Angeles push, Sezmi has deals to use spectrum of four stations: Pappas' KAZA, Ellis Communications' KDOC, Liberman Broadcasting's KRCA and noncommercial KOCE.

Sezmi's current plan is to have two tiers of service. The basic tier, comprising all over-the-air broadcast signals and access to the online VOD service, goes for $4.95 per month with extra fees for the VOD offerings.

The upper tier, Sezmi Selects, adds 23 popular cable networks and is priced at $24.96.

Consumers will have the option of buying the set-top box for $299 or leasing it for $10-$12 per month.

"The goal is to have clear, simple pricing," says David Allred, senior vice president, marketing and product management.

Sezmi is relying on telcos and major retailers to assist it in marketing the service and distributing the set-top boxes. However, Sezmi executives declined to indentify any of the marketing partners.

Sezmi is a privately held company with financial backing from Morgenthaler Ventures, OmniCapital Group, Index Ventures, TD Fund, Legend Ventures and Advanced Equities Inc. To date, Sezmi says, it has secured $50.5 million in financing. 

The company released a list of the cable networks that will be part of the Los Angeles service: Bravo, Animal Planet, Discovery, Planet Green, Comedy Central, MSNBC, VH1, Cartoon Network, MTV, Nickelodeon, TLC, USA, CNN, Science, CNBC, Oxygen, SyFy, HLN, Broomarang, TNT, TruTV, TBS and TCM.

Paramount Pictures, 20th Century Fox, Lionsgate, Sony, Universal Studios, MGM and Warner Bros. are providing online content for the VOD service along with Sonic Solutions' Roxio CinemaNow service.

Because the Sezmi services relies on leasing broadcast spectrum in each market it enters, says Wiser, it does not favor the FCC ‘s proposal to reallocate broadcast spectrum for wireless broadband access. Broadcasters and the government just spent billions of dollars to convert broadcasting from analog to digital, he says.

"Changing that four months later is not necessarily a course of action that is sensible," he says. "There is a large amount of spectrum across other bands that is not only more suitable for the types of uses the FCC is exploring, but also more practical for short-term benefits."