Alternate Digital Content Distribution for the Last Mile

1. 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

2. 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

3. In Conjunction with • Leading Valuation Firm in Broadcasting & Telecom • Premier Industry Research Publisher • Established Communications Investment Advisor

4. Who is SpectraRep?

5. ’s Mission 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.

6. 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.

7. Programming-related satellite transmission services Satellite space segment on a contractual, recurring, and occasional basis C-Band and Ku-Band satellite transmissions, analog and digital fixed and transportable uplinks TVRO downlinks and terrestrial facilities domestic 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.

8. The Internet is bandwidth challenged.

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

10. 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.

11. Customer Need Segments

12. Connectivity Options

13. Pros and Cons of Services Source: Adapted from Deutsche Banc Alex Brown, January 28, 2000

14. Market Supply Segments DTV MMDS LMDS UHF Wireless Cellular PCS DTH ISM Hybrid Network Deployments DSL Cable Wired Dial-up phone T-1 Narrowband Broadband

15. Point-to-Multipoint Scale Advantages Wireless added value Wireless 1-to-Many Wired or Wireless 1-to-1

16. Broadcasting is Push from Video to Data

17. DTV Datacasting Pros & Cons

18. DTV Datacasting Benefits • 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 01100101110110110 11011100110101000 11101010001110011 01101001101001010

19. Satellite Data Distribution Advantages • 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

20. SpectraRep Digital Content Alternate Distribution Network

21. Satellite Backbone to DTV Satellite Satellite dish Satellite dish DTV Tower Satellite Direct to Customer DTV to Customer Satellite Satellite dish Satellite dish First Mile Preparation Acquisition DTV Tower Content Satellite to the Edge Satellite ISP or Satellite dish Satellite dish Cable System Internet SpectraRep Designs the Solutions, Assembles and Manages the Alliance for Digital Content Delivery Optional Return Path

22. Case Studies • NATPE 2001 • National Association of Television & Program Executives • Northern Virginia Technology Council • “Titans of Technology” keynote address by Dan Akerson, XO Communications

23. January 2001 • Live streaming video • DTV datacast at 512 kbps • Simultaneous HDTV • Technology Partners • Sun Microsystems Real Networks • Triveni Digital • KLAS-DT

24. February 22, 2001 • “Titans of Technology” • Keynote speech by Dan Akerson, XO Communications • Hilton McLean, Tysons Corner, VA • Technology Partners • Streampipe.com • Wavexpress • WETA-DT • NJN Public Television • EFX Media Services

25. Real Format Encoder 100 + 500 Kbps Stream Server WETA NJN Wavexpress Receiver Wavexpress Receiver Transmitter Transmitter Modulator Modulator Skystream Skystream Fiber Distribution Fiber Distribution Encoder Encoder Internet “Titans” Tysons Corner, VA GE-3 Fiber Satellite Encapsulator/ Uplink GE Americom GE Americom Feed Washington, DC Trenton, NJ

26. The DTV Roll-Out in the U.S.

27. 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

28. 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 --

29. 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 -- May 1, 2002 November 1, 1998 *177 stations on the air in 61 markets as of 1/21/2001 Serving 2/3 of the U.S. population

30. 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

31. 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

32. Datacasting • Real Time • Internet Broadcasting • Mediacasting • Non-Real Time • Filecasting • Cachecasting • Wireless webcasting • Etc., etc.

33. 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.

34. Customers Publishing ISPs Streaming Media Distance Learning Messaging Corporate Comm Cable Modem Providers Building Owners Benefits Last mile broadband Wireless Multicast Scalable Packetized Datacasting:Customers and Benefits

35. 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

36. IP Video Streaming Service Data Streaming Service 18 Mbps 19.38 Mbps HDTV & Audio

37. Opportunistic Data Capacity Opportunistic Data Capacity 19.38 Mbps HDTV & Audio

38. SDTV Data Services Programming related data services Multiple SDTV & Audio 19.38 Mbps

39. 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