Fund Raising Strategic Consulting Data Management Expert Valuations Research

Alternate Digital Content Distribution for the Last Mile

Mark Fratrik, Ph.D.

Vice President

BIA Financial Network

Broadband Wireless Forum

San Francisco, CA

February 21, 2001

                                                                                                                 

www.spectrarep.com

Agenda

Who is SpectraRep? Bandwidth capacity challenged. Bandwidth Demand is growing but supply is

not keeping up. DTV and satellite datacasting advantages

and case studies. The digital television roll-out in the U.S. Benefits of DTV datacasting. Summary

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Leading Valuation Firm in Broadcasting & Telecom

Premier Industry Research Publisher

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In Conjunction with

R esearchIn d us try In fo rm a tion

& S o ftw a re

In vestm ent A d viso ryIn ves tm e n t B a nk ing

& A d v iso ry

C o nsultingF in a nc ia l &

S tra te g ic

B IA Fin an cia l N etw o rk Sp ectraR ep

www.spectrarep.com

Who is SpectraRep?

www.spectrarep.com

We live in a world in which consumer and

enterprise demand for last mile bandwidth

will continue to exceed supply.

Our mission is to be a leading developer and provider of innovative and cost-effective digital content distribution solutions for

businesses and consumers, using bandwidth provided via satellite and television.

’s Mission

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DTV and Satellite IP Datacasting

Services company Broadband, wireless,

multicast, last mile to the customer

Scalable solutions Solutions designed around

customer requirements Open partnerships The SpaceConnection, Inc.

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Programming-related satellite transmission services

Satellite space segment on a contractual, recurring, and occasional basis

C-Band and Ku-Band satellite transmissions,

analog and digitalfixed and transportable uplinksTVRO downlinks and terrestrial facilitiesdomestic and international distribution

One of the largest inventories of C-Band and Ku-Band transponders worldwide for video, audio, data and internet services.

ABC, CBS, FOX, NBC, PBS); cable programmers (e.g., CNN, HBO, MTV)

Transmission services for events such as: The Super Bowl, World Series, Winter and Summer Olympics, World Cup Soccer Matches, Space Shuttle Launches, among the tens of thousands of events arranged each year.

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The Internet is bandwidth challenged.

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“The demand for bandwidth grows 100 times faster than we can deliver it.”

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Bandwidth supply not pacing demand.

Bandwidth being rolled out at frantic pace, but uses growing faster.

Internet backbone having trouble scaling to broadband use by mass user base.

Broadband suppliers starting to use private high capacity networks.

Bandwidth limitations affecting offerings. Streaming media offerings strained to serve “flash events” For each broadband user, 50 narrowband users Last mile broadband an issue

Broadband cable service designed to serve 10,000 user base, serve 5-10% of this base.

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Customer Need SegmentsApplications Business to

Business (B2B)

Business to Employee (B2E)

Business to Consumer (B2C)

Streaming media

Distance learning

HTML email

Webcasting

Intranet/VPN

Multimedia catalogs

Cache updates

Database updates

TV program-related data

Software updates

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Connectivity Options

Service Type Download Upload

Dial-up 53 kbps 33.6 kbps

ISDN 128 kbps 128 kbps

Satellite 400 kbps Modem

DSL 350 – 500 kbps 350 – 500 kbps

Cable modem 1.54 Mbps 300 kbps

Wireless 128 kbps to 1.54Mbps

128 kbps to 1.54 Mbps

DTV 1-10+ Mbps Modem

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Pros and Cons of Services

Service Provider Advantage Vulnerability

Cable Robust, 2-way, video centric, owns set-top

MSO service, truck roll

Satellite QoS, TV centric, remote areas

Weather issues, return path

DTV High concurrent use media

Return path

DSL Broadband, availability

PC centric, remote areas

Wireless Build-out cost, remote areas

Limited coverage, return path

Dial-up High penetration Low data speeds

Source: Adapted from Deutsche Banc Alex Brown, January 28, 2000

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Market Supply Segments

Wireless

Wired Dial-up phone

Narrowband Broadband

DSLCable

DTH DTVMMDSLMDSUHF

ISMCellularPCS

Hybrid Network Deployments

T-1

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Point-to-Multipoint Scale Advantages

Customers

Cost Wireless 1-to-Many

Wireless added value

Wired or Wireless 1-to-1

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Broadcasting is Push from Video to Data

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DTV Datacasting Pros & Cons

Assets Limitations

Broadband Quality of service

Wireless Mobility

Scalable Transmission scheme

Multicast Receiver penetration

Coverage One-way

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Wireless Broadband Local, Regional, Nationwide Last mile solution One-to-many economies Scalable infrastructure Does not require cellular-like

build out Significant through-put up to 15+

Mbps Security, encryption, conditional

access

DTV Datacasting Benefits

01100101110110110110111001101010001110101000111001101101001101001010

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National coverage

Substantial capacity available in

non-peak periods

Satellite receive infrastructure in place or

easily installed

Network is flexible

Digital technology handles video, audio and

data

Satellite Data Distribution Advantages

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Server Satellite dishServerMarket 2

Satellite

ServerMarket 3

ServerMarket 1

DTV Tower

DTV Tower

DTV Tower

SpectraRep Digital Content Alternate Distribution Network

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AcquisitionPreparation

Satellite dish

Satellite

DTV Tower

DTV Tower

Satellite dish

Satellite dish

Satellite

Satellite dish

Satellite dish

Satellite

Satellite dish

Satellite Backbone to DTV

Satellite Direct to Customer

DTV to Customer

Satellite to the Edge

Internet

Content

FirstMile

ISP orCable System

OptionalReturn Path

SpectraRepDesigns the Solutions,

Assembles and Manages the Alliance forDigital Content

Delivery

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Case Studies

NATPE 2001 National Association of Television & Program

Executives

Northern Virginia Technology Council “Titans of Technology” keynote address by Dan

Akerson, XO Communications

www.spectrarep.com

January 2001 Live streaming video DTV datacast at 512

kbps Simultaneous HDTV Technology Partners

Sun Microsystems Real NetworksTriveni DigitalKLAS-DT

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February 22, 2001 “Titans of Technology”

Keynote speech by Dan Akerson, XO CommunicationsHilton McLean, Tysons Corner, VA

Technology PartnersStreampipe.comWavexpressWETA-DTNJN Public TelevisionEFX Media Services

www.spectrarep.com

Skystream

Modulator

Transmitter

WavexpressReceiver

FiberDistribution Encoder

WETA

Skystream

Modulator

Transmitter

WavexpressReceiver

FiberDistribution Encoder

NJN

Real FormatEncoder

100 + 500 Kbps

“Titans”Tysons Corner, VA

Internet

StreamServer

SatelliteEncapsulator/

Uplink

GE-3

GE Americom

GE AmericomFeed

Trenton, NJWashington, DC

Fiber

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The DTV Roll-Out in the U.S.

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DTV Building Blocks

DTV conversion timetable DTV devices in the market HDTV programming Program related data services Non-program related data applications Standards and interoperability Market acceptance

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Digital TV U.S. Transition Schedule

Category #Stations Markets Type Air Date % USTVHH

0 24 Top 10 Voluntary Nov 98 --

1 40 Top 10 Network May 99 30%

2 80 Top 30 Network Nov 99 53%

3 ~1,037 All Various May 02 100%

4 ~365 All Non-comm May 03 --

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Category #Stations Markets Type Air Date % USTVHH

0 24 Top 10 Voluntary Nov 98 -- 1 40 Top 10 Network May 99 30% 2 80* Top 30 Network Nov 99 53% 3 ~1,037 All Various May 02 100% 4 ~365 All Non-comm May 03 --

November 1, 1998 May 1, 2002

*177 stations on the air in 61 markets as of 1/21/2001Serving 2/3 of the U.S. population

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Broadcasters and New Business Models with DTV

Digital Bit Stream Resource 19.38 Mbps

Service Types HDTV (12-18 Mbps) SDTV (4 Mbps) Data (Opportunistic and/or Fixed)

Business Models HDTV SDTV Multicasting Program related/enhanced data Non-program related data

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DTV Ancillary Data Opportunity

What is the opportunity for broadcasters in DTV ancillary data?

Market supply segments Broadband Wireless Internet Datacasting Mediacasting

Customer need segments B2B: Business to Business B2E: Business to Employees B2C: Business to Consumers

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Datacasting

Real Time Internet Broadcasting Mediacasting

Non-Real Time Filecasting Cachecasting Wireless webcasting

Etc., etc.

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Market Opportunity for DTV Ancillary Data

Internet Broadcasting Fiber & Copperl networks are not multicast-enabled. Need exists for delivering content in “multicast mode.” Multicast = point-to-multipoint. Bandwidth intensive applications increasing. ISPs and others trying to meet demand, contain costs. Looking for multicast, broadband solutions.

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Datacasting:Customers and Benefits

Customers Publishing ISPs Streaming Media Distance Learning Messaging Corporate Comm Cable Modem

Providers Building Owners

Benefits Last mile broadband Wireless Multicast Scalable Packetized

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Benefits of Datacasting

Content accessible to larger real-time audience. Increase revenue and market presence

Reduces bandwidth needed Cost savings

End users enjoy higher QoS Avoid network congestion from last mile

Enables new service offerings Streaming media Bandwidth intensive applications E-commerce

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Data Streaming Service

18 Mbps

19.38 Mbps

HDTV & Audio

IP Video Streaming Service

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Opportunistic Data Capacity

Opportunistic Data Capacity

19.38 Mbps

HDTV & Audio

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Programming related data

services

SDTV Data Services

19.38 Mbps

Multiple SDTV & Audio

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Summary

Digital television provides wireless, broadband, last mile multicast infrastructure today.

Satellite opportunities exist for direct to end-user, bypassing Internet cloud, and as backbone for regional and national DTV links.

Wireless, one-to-many, satellite and DTV broadband solutions allow digital content companies and their customers a cost-effective and technically compelling solution to scaling business models.

“Some Assembly Required” – solution requires planning and managing various components into one seamless system