Millenium and Aerocast Go Streaming in Seattle

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

Among its findings: The quality threshold for streamed video that consumers could stomach typically tapped out at about 650 kilobits per second. Aerocast and Millennium tested bit rates ranging from 300 kbps to 1 megabit per second, said Aerocast president Dario Santana.

"Viewers were given choices and asked to compare lower and higher data rates," Santana said. "Six hundred fifty kbps was the threshold for a consistent response in which consumers would say, 'I would pay for this, if I could get it consistently.'"

Technology advancements could lower that bar to about 500 kbps, he added. The challenge, Santana said, is replicating that in the field.

"There's no doubt that bit rates will continue to be reduced over time," he said.

Though 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 capabilities and overall technical muscle power, PC hardware and software configurations, by comparison, can vary greatly from one machine to the next. A 250-megahertz PC was the typical processing threshold for full-screen, streamed video, Aerocast found.

"Video streamed in partial screen will get by with less power in the CPU, but for full-screen with today's codecs, 250 MHz was the line," Santana said.

For the Millennium trial, Aerocast said it offered a limited content menu from ACTV Inc., OasisTV, Starz Encore Group LLC, PBS, Music Choice, Home & Garden Television, Court TV and Dynamic Digital Depth, a 3-D programmer backed by Motorola Inc.

Aerocast plans to add more content as it rolls out additional trials, Santana said. For the technical trial with Millennium, "quality was more important than quantity," he said.

The core of Aerocast's technology is the "Aerocast Video Exchange" (AVX) server, which can rest inside a cable headend or be distributed to the edge of a broadband network. For the Millennium trial, Aerocast installed an AVX inside the operator's headend.

On the PC client side, Aerocast uses a small software program called "Rabbit," which relays Aerocast-enabled content to video streaming applications such as Microsoft Corp.'s Windows Media Player, Apple Computer Corp.'s QuickTime or RealNetworks Inc.'s RealPlayer. Rabbit, in turn, talks to Aerocast's "Intelligent Routing System," which pre-positions content at the edge of the network or at the headend.

If the content is not available there, Aerocast's routing system determines the quickest way to obtain it-either from a large server on the East Coast or an adjacent Aerocast network server.

Aerocast emerged from stealth mode last December at the Streaming Media West show in San Jose, Calif. Financial backers include Motorola and Liberty Satellite LLC, a joint venture owned by Liberty Media Corp. and Liberty Satellite & Technology.

Leveraging Internet-protocol for video saves both bandwidth and cost, and could become the future transport method for cable operators, Santana predicted.

By bypassing the public Internet "cloud" and focusing on the "last mile" of a network, hosting and transportation costs are curtailed significantly when compared to the $1,000 to $2,000 per megabit per month paid by other distribution providers to stream TV-quality video over the Internet, he added.

MPEG LEADS OVER IP

The use of IP for video transport has been explored for years. For example, video-on-demand provider Intertainer Inc. uses the technology to push movies and other titles over digital subscriber lines.

Thus far, Intertainer's only announced trial on the cable front is with Comcast Corp., which is testing the service to select households in Willow Grove, Pa., and Monmouth County, N.J.

At present, cable operators typically offer VOD using the Moving Pictures Expert Group-2 compression standard, which streams video in the neighborhood of 3 megabits per second. MPEG-4, which is still under development, promises to render video at much lower bit rates.

Millennium, which competes with AT&T Broadband in Seattle, believes a streaming service such as Aerocast's can give it a leg up on other cable-modem and digital subscriber line service providers.

Today, Millennium offers Data Over Cable Service Interface Specification-based high-speed services under the "CableSpeed" brand. Altogether, Millennium has about 175,000 broadband customers in Seattle, in a number of Michigan properties previously owned by Horizon Cable and in Baltimore, where it competes with Comcast. Millennium also offers dial-up and DSL Internet services in some markets.

"We were interested in adding more value to our cable-modem product," said Steven Weed, president of Millennium's Northwest region. "We think this will be a popular product, because our [trial] subscribers saw a much better streaming product than they could get anywhere else. DOCSIS has incredible capacity that's underutilized."

Weed said Millennium is in talks with Aerocast about participating in the second phase of the streamer's testing schedule, perhaps as early as the end of the year.

The next step in Aerocast's trials will be to broaden the testing pool to gauge how much consumers would be willing to pay for the service. Aerocast also plans to test a number of different packaging schemes, Santana said, noting that the company currently is conducting other technical trials with undisclosed MSOs, including two outside North America.

Santana said more trials will help to determine how best to divide revenues among Aerocast and its content and service-operator partners.

If all goes according to plan, Aerocast intends to roll out its system commercially by mid-2001. Recent studies, however, have indicated that streaming VOD to the PC has yet to become a prominent item on consumer wish lists.

In its latest Pulse
study, titled "Does Anybody Really Know What Broadband Is?," the Cable & Telecommunications Association for Marketing suggested that about 45 percent of 809 cable customers surveyed were interested in streaming some type of programming to a PC.

But whether consumers will be more enticed to stream video directly to a set-top with an on-board cable-modem also has yet to be determined. A few technological advancements will have to be made before Aerocast will know for sure.

Santana acknowledged that today's set-tops could handle limited video streaming, but more processing firepower will be required to support streaming bit rates for high-quality, full-screen video.

Emerging high-powered "residential gateways"-coupled with home-networking and cable-modem components-will help usher in that experience for consumers, and allow them to push video to TVs, PCs, personal digital assistants, Web pads and other Internet appliances, Santana predicted.

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