Aerocast Takes Streaming to Task

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Streaming start-up Aerocast.com Inc. said it has sewn up its first technical
trial, offering a mix of video clips and full-length videos on-demand to about
30 Millennium Digital Media customers in Seattle.

Among its findings during the three-month trial, Aerocast discovered that the
quality threshold among consumers for streamed video most often tapped out at
about 650 kilobits per second. Aerocast and Millennium tested bit rates ranging
from 300 kbps to 1 megabit per second, Aerocast president Dario Santana
said.

'Viewers were given choices and asked to compare lower and higher data
rates,' Santana said. '650 kbps was about the breaking point when a customer
would say, `Wow,' versus, `This is OK.''

Although streaming video to set-tops is among Aerocast's future goals, this
pilot involved only the delivery of video to PCs using Internet protocol. That
decision wrought its own set of technical challenges.

While set-tops are rather rigid in terms of their processing capacities and
overall technical muscle power, PC hardware and software configurations, in
comparison, can vary greatly from one machine to the next. A processor running
at 250 megahertz was the dividing line for full-screen, streamed video, Aerocast
found.

The core of Aerocast's technology is its 'Video Exchange' server, which rests
inside a cable headend or can be distributed to the edge of a broadband network,
and a small client-based software program called 'Rabbit,' which relays content
to consumers who use video-streaming applications such as Microsoft Corp.'s
'Windows Media Player' or Apple Computer Inc.'s 'QuickTime.'

Leveraging IP for video is a bandwidth and cost saver, and it could become
the transport method cable operators use in the future, Santana forecast. VOD
provider Intertainer Inc. uses IP, but it has yet to convince cable operators to
deploy it commercially.

Millennium, which competes with AT&T Broadband in Seattle, believes
offering a streaming service such as Aerocast can give it a leg up against other
cable-modem and digital-subscriber-line service providers.

'We were interested in adding more value to our cable-modem product,' said
Steven Weed, president of Millennium's Northwest region. 'DOCSIS [Data Over
Cable Service Interface Specification] has incredible capacity that's
underutilized.'

Weed said Millennium is in talks with Aerocast about participating in phase
two of the streamer's testing schedule. That could happen before the end of this
year, he added.

Aerocast's next trial step will gauge how much money consumers would be
willing to spend for such a service and test different ways to package the
service, Santana said. The company is currently conducting other technical
trials with yet-to-be-named MSOs.

If all goes according to plan, Aerocast plans to roll out its system
commercially by mid-2001.

Aerocast made its official entrance in December at the Streaming Media West
show in San Jose, Calif. Its financial backers include Motorola Inc. and Liberty
Satellite LLC, a joint venture owned by Liberty Media Group and Liberty
Satellite & Technology Inc.

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