Online-Video Startup Vuze Pockets $20 Million

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Vuze, a startup that runs a peer-to-peer Internet video distribution service, said it has raised $20 million in third-round funding and named TiVo co-founder Mike Ramsay to its board of directors.

The funding brings Vuze's total raised to date to $34 million. The round was led by New Enterprise Associates (NEA), the venture-capital firm where Ramsay is a partner, and included participation from existing investors Redpoint Ventures, Greycroft Partners, BV Capital and CNET chairman Jarl Mohn.

Vuze -- formerly known as Azureus -- claimed it has signed more than 100 premium-content partners, including Showtime Networks, Starz Entertainment, BBC, A&E Television Network's Biography Channel and A&E, and Rainbow Media's IFC.

The Palo Alto, Calif.-based startup said that since launching in January 2007, the service has had more than 15 million client downloads.

Vuze also announced the hiring of several executives, including senior vice president of content Rick Phillips, who previously negotiated content deals for Microsoft’s Xbox Live Video Marketplace; vice president of marketing John Fernandes, previously in charge of eBay's global marketing and research; and senior vice president of ad sales Jim Diaz, who has worked at NBC and Excite.com.

The startup's software uses the BitTorrent-developed peer-to-peer protocol to distribute video files over the Internet by using users' own computers as relay points.

Last month Vuze filed a petition with the Federal Communications Commission, urging the agency to implement rules that would prevent Internet service providers from "interfering" with P2P traffic. That came after Comcast, responding to allegations in an Associated Press report, acknowledged that it delays certain kinds of Internet traffic, which it has defended as "reasonable network management."

Consumer interest groups also complained to the FCC about Comcast's bandwidth-throttling practices, and at least one disgruntled subscriber sued the cable operator over the issue.

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