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SKADDEN,
ARPS, SLATE, MEAGHER & FLOM LLP

525
UNIVERSITY AVENUE

PALO
ALTO, CALIFORNIA 94301

(650)
470-4500

Fax:  (650) 470-4570

http://www.skadden.com

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  BOSTON

  October 18,
  2005

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VIA EDGAR

Mark P. Shuman, Esq.

Office of Computers and Online Services

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C.  20002

  Re:

  Liberate
  Technologies

  Amendment
  No. 2 to Schedule 13E-3 filed October 18, 2005

  File
  No. 005-58281

  Revised
  Preliminary Proxy Statement on Schedule 14A

  Filed
  October 18, 2005

  File
  No. 0-26565

Dear Mr. Shuman:

On behalf of Liberate Technologies, a Delaware
corporation (the “Company” or “Liberate”), we have electronically transmitted
under separate cover Amendment No. 2 to the Preliminary Proxy Statement on
Schedule 14A (“Amendment No. 2 to the Preliminary Proxy”), which we
have marked to show changes from the Company’s filing of the Amended
Preliminary Proxy Statement on Schedule 14A (File No. 000-26565),
filed by the Company on August 26, 2005 (the “Preliminary Proxy”) and
Amendment No. 2 to the Rule 13e-3 Transaction Statement on Schedule 13E-3
(File No. 005-58281) filed by the Company on June 23, 2005 as amended
by Amendment No. 1 to the Rule 13e-3 Transaction Statement filed by
the Company on August 26, 2005 (together, the “Schedule 13E-3”).  The changes reflected in Amendment No. 2
to the Preliminary Proxy and Amendment No. 2 to the Schedule 13E-3
include those made in response to the comments of the Staff of the Securities
and Exchange Commission (the “Staff”) set forth in the Staff’s comment letter,
dated September 28, 2005.

Set forth below are the Company’s responses to the
comments raised in your letter.  For your
convenience, we have provided each of your numbered comments followed by our
responses.  To facilitate the Staff’s
review, we have provided the Company’s responses in ordinary type beneath the
corresponding Staff comment, which appears in bold type.

Schedule 13E-3

1.             We note your response to our prior comment
2.  You indicate that the SeaChange asset
sale is not the type described in SEC Release 34-16075.  We note however, that the release cites to
transactions of the type described therein only as typical examples and is not
intended to be exclusively limited to such examples.  Further, as the release suggests, while a
sale of assets to a non-affiliate is not a transaction specified in paragraph
Exchange Act Rule 13e-3(a)(3)(i), a purchase by an issuer, in this case,
the cashing out of fractional shares, would be such a transaction, and
therefore the combination of these transactions could constitute a series of
transactions involving a transaction specified in paragraph (a)(3)(i).  In your response letter, please expand your
discussion and analysis as to why you believe that SEC Release 34-16075 is not
applicable to this transaction.

Response:

SEC Release 34-16075
would be applicable to the SeaChange asset sale transaction if that transaction
was the first step in a multistep transaction that included the proposed
reverse/forward stock split.  However,
the SeaChange asset sale and the reverse stock split are two separate and
unrelated transactions.  The Liberate
board of directors approved and supported the SeaChange transaction on a
stand-alone basis, and not as part of a pre-arranged plan to take Liberate
private.  The SeaChange asset sale was
not a necessary first step in order to accomplish the proposed reverse/forward
stock split (or any other type of “going private” transaction) nor a
transaction that facilitated the reverse/forward stock split.  As indicated in our response to comment 2
below, for example, Liberate would have had sufficient financial resources to
accomplish the reverse/forward stock split without proceeds from the SeaChange
asset sale.  Furthermore, even if the
SeaChange asset sale were not completed, given the relative size of Liberate’s
operations and the public company costs, the board likely would have considered
undertaking the reverse stock split in any event.  Accordingly, we respectfully submit that SEC
Release 34-16075 is not applicable to the SeaChange asset sale.

2.             You indicate in your response to our prior
comment 2 that the SeaChange asset sale did not have a reasonable likelihood of
producing the effects set out in Rule 13e-3(a)(3)(ii).  In support of such conclusion, you indicate
that the reverse/forward stock split could have been accomplished before the
asset sale transaction.  Please
substantiate this statement.  For
example, did you have the financial resources, given your monthly burn rate,
liquidity and outstanding obligations, to cash out the fractional shares
following the Double C asset sale and the $2.10 dividend that you issued on April 8,
2005?

2

Response:

As set
forth in greater detail below, Liberate did have sufficient resources following
the Double C asset sale and payment of the $2.10 Double C special dividend on April 11,
2005 to effect a reverse stock split and cash out fractional shares in a
transaction such as is now being proposed, even in the absence of the proceeds
from the SeaChange asset sale.  Such a
transaction would probably have required a cash outlay in the aggregate amount
of between $6.2 million to $7.2 million in contrast to the approximately $4.3
million that the Company estimates will be expended in the proposed
transaction. Prior to the SeaChange asset sale, the Company had cash and cash
equivalents on hand of approximately $47 million and a burn rate near
zero.  The Company’s approximately $2.5
million of quarterly costs were offset by approximately $2.5 million
quarterly receipts from customers.  In
contrast, after the SeaChange asset sale, the Company had cash and cash
equivalents of $70 million, and its burn rate increased to approximately $1.2
million per quarter.  In addition, after
the SeaChange asset sale, Liberate paid its stockholders a special dividend of
approximately $16.6 million from the proceeds of the sale.  Taking into account Liberate’s burn rate and
the liabilities (including contingent liabilities) facing Liberate prior to the
SeaChange asset sale, Liberate’s approximately $47 million cash on hand prior
to the SeaChange asset sale would have been more than sufficient to pay the
estimated $6.2 to $7.2 million that would have been required to cash out
fractional shareholders had the reverse/forward stock split occurred prior to
the SeaChange asset sale.

Determining
the amount to be paid to cashed out fractional stockholders requires that fair
value for the fractional shares be determined.
Although determining fair value of a company’s stock in the context of a
company with an operating business can be more complicated than in the context
of a company without one, the trading price of a corporation’s stock on the
public market is good evidence of that stock’s fair value.  During the five trading days between payment
of the Double C special dividend on April 11, 2005 and the public
announcement of the SeaChange asset sale on April 15, 2005 the weighted
average closing price for a share of Liberate common stock was $0.36 per share
and on April 15, 2005, the day before the public announcement of the
SeaChange asset sale, the closing price for a share of Liberate’s common stock
was $0.34 per share.  Similarly, during
the period starting on April 11, 2005, the Double C ex-dividend date,
and ending on June 15, 2005, the date the SeaChange asset sale special
dividend was declared and the day before the reverse/forward stock split was
announced, the weighted average closing price for a share of Liberate common
stock was approximately $0.35 per share.  During the 30 trading days ending on June 15,
2005, the weighted average closing price for a share of Liberate common stock
was approximately $0.31 per share.  Taking
these market values as a fair proxy for fair value and assuming, as disclosed
in the Preliminary Proxy, cash out of approximately 20 million fractional
shares, Liberate would have needed between approximately $6.2 million and
$7.2 million to cash out fractional shares had the proposed reverse/forward
stock split happened before the SeaChange asset sale.

3

As
disclosed in Liberate’s annual report on Form 10K for the fiscal year
ended May 31, 2005 filed with the Commission on August 15, 2005, as
of May 31, 2005, Liberate had cash and cash equivalents of more than $47
million, an amount well in excess of the amount that would have been required
to pay cashed out fractional stockholders.
The Company’s cash flow rate prior to the SeaChange asset sale was
approximately break even.  After the
SeaChange asset sale, Liberate’s cash and cash equivalents increased to
approximately $54 million, taking into account the receipt of approximately $23 million
cash proceeds of the sale net of the approximately $16.6 million Liberate paid
to its stockholders as a special dividend from the proceeds of the sale, but
the Company’s burn rate increased to approximately $1.2 million per quarter.  Liberate’s burn rate increased after the
SeaChange asset sale because the non-North American business sold to SeaChange
was cashflow neutral.

Not
only did Liberate have the resources that would likely have been required to
undertake the proposed reverse/forward stock split before the SeaChange asset
sale, but, had the SeaChange asset sale never occurred, given the relative size
of what would have been Liberate’s continuing operations and the costs of
remaining a public corporation, it is likely that Liberate’s board would have
considered undertaking the proposed reverse/forward stock split in any event.

3.             We note your response to our prior comment
4.  Supplement your disclosure to include
the information regarding the vesting of options and units.

Response:

Liberate has expanded the
disclosure in the chart entitled “Amount and Nature of Beneficial Ownership” in
the Section entitled “SPECIAL FACTORS – Security Ownership of Certain
Beneficial Owners and Management” in the Preliminary Proxy in response to the
Staff’s comment.

Preliminary
Proxy Materials

4.             We reissue our prior comment 10, in
part.  Provide an overview and range of
the potential benefits in quantitative terms that continuing stockholders may experience as a consequence of
successful efforts to recover on claims against others and limit liabilities to
others.

4

Response:

Liberate has expanded the
disclosure in the Sections entitled “SPECIAL FACTORS – Background of the
Reverse/Forward Stock Split Proposal – Ongoing Legal Claims” and “SPECIAL
FACTORS – Legal Proceedings” in response to the Staff’s comment.

5.             We note your response to our prior comment
12.  You indicate that your non-North
American Assets were sold to SeaChange and that the “take private” transaction
was then considered as a method
to reduce overhead and reporting costs after the disposal of all the Company’s
operating businesses.  However, your
disclosure in the proxy statement as well as in your other responses indicates
that you considered a going private transaction prior to the closing of the
sale of your assets to SeaChange.  Please
clarify this inconsistency.

Response:

As disclosed in the
Preliminary Proxy in the section entitled “SPECIAL FACTORS – Background of
the Reverse/Forward Stock Split Proposal – “Board Deliberations and Background
of the Reverse/forward Stock Split”, the Liberate board of directors first
directed management to evaluate the possibility of converting to a private
company together with other potential ways of addressing the costs of
continuing as a publicly traded company (including dissolution and liquidation
of the Company, sale as a public company shell, a share repurchase and other
alternatives) after approving the SeaChange asset sale at a board meeting on April 15,
2005.  The board realized, of course,
that were the SeaChange asset sale to be consummated, the Company would be
disposing of its remaining operating assets.
The board therefore began to consider the alternatives that might be
undertaken following consummation of the asset sale.  As described in the Preliminary Proxy,
management, together with the board, continued these evaluation efforts over
the succeeding months.  At the time
Liberate filed its definitive proxy statement in connection with the SeaChange
asset sale on June 10, 2005, these efforts were still ongoing and the
board of directors had made no determination with respect to potential plans
for Liberate after the SeaChange asset sale.
That the board was considering these alternatives, including a going
private transaction, was disclosed in the Company’s proxy statement relating to
the SeaChange asset sale.  On June 15,
2005, after additional presentations and discussion, Liberate’s board concluded
that the proposed reverse/forward stock split would be in the best interests of
the Company and its stockholders.  On June 23,
2005, the Company filed the initial Preliminary Proxy relating to the proposed
reverse/forward stock split.  The
SeaChange asset sale subsequently closed on July 12, 2005.

6.             We reissue our prior comment 18, in
part.  Revise your disclosure to explain
in greater detail why a liquidation analysis was not performed.  See Question
and Answer No. 20 of Exchange Act Release No. 34-17719.

5

Response:

As
disclosed in the section entitled “SPECIAL FACTORS – Recommendation of the
Board; Fairness of the Transaction – Cashed-Out Stockholders – Liquidation
Value” of the Preliminary Proxy, Liberate’s board of directors did not
determine the value of Liberate’s shares on the basis of a forced or current
liquidation in determining the cash amount to be paid to cashed-out
stockholders in the reverse/forward stock split because the board did not consider
the forced liquidation of Liberate’s business to be a viable option.

As
described in the Preliminary Proxy, upon consummation of the SeaChange Asset
Sale, Liberate would have no significant operating product or services business
but it will continue operating in a capacity to wind down the business and
attempt to resolve the Company’s outstanding contingent assets and liabilities.
Given the nature of Liberate’s expected contingent assets, liabilities and
obligations after consummation of the SeaChange Asset Sale, an immediate forced
liquidation of our business did not appear to be a viable option.  The board determined that it would require
time to resolve outstanding liabilities and prosecute and defend pending
litigation and pursue other claims as appropriate that Liberate may have
against third parties.

As
disclosed in the section entitled “SPECIAL FACTORS – Recommendation of the
Board; Fairness of the Transaction – Cashed-Out Stockholders – Liquidation
Value” of the Preliminary Proxy, the Discounted Cash Flow Analysis conducted by
Duff & Phelps was effectively premised as an orderly disposition of
assets since Liberate would have no significant operating product or services
business upon the consummation of the SeaChange asset sale.  Duff & Phelps did not separately
estimate the forced or current liquidation premise of value.  Duff and Phelps believed that early
settlement of contingent assets and liabilities through a current liquidation
or short term forced liquidation would result in less value to Liberate’s
stockholders than operating the business as a going-concern until consummation
of the SeaChange asset sale and thereafter operating the business by orderly
disposing of the Company’s net assets for an indefinite period of time until
such time that Liberate resolves its out