AT&T to Start Content Delivery Services

BOSTON (07/10/2000) - AT&T Corp. will enter the content delivery and streaming media market, unveiling a plan Monday to provide services for companies to create, manage and distribute audio and video over the Internet.

AT&T plans to make the services available in the first quarter of 2001, said Kathleen Earley, president of AT&T data and Internet services. "We're pledging that this platform will serve 10 million simultaneous Internet users in the next 18 to 24 months."

The "Ecosystem for Media" will include services for producing digital video and audio, Web site acceleration, streaming media, distance learning and media-enriched e-commerce. AT&T is working with Inktomi Corp., Loudeye Technologies Inc., RealNetworks Inc., Microsoft Corp. and other companies to create the program.

"We believe firmly that it is services like this that will turn the Internet into an entertainment medium," said Will Poole, vice president of Microsoft's digital media division. "This will inject some passion, and the ability to entertain."

AT&T is spending US$200 million building the infrastructure for the plan -- servers, load-balancing equipment and the like. With AT&T's purchase of MediaOne Group Inc. complete, 16 million cable -- and potential high-speed modem -- customers make a base for bandwidth-chewing streaming media services.

"I think it kind of compliments AT&T," said Alex Benik, a communications analyst from the Yankee Group. "The MediaOne acquisition really fills out their portfolio. This is very interesting for them. It really validates the market, when you see a company like AT&T enter the market."

AT&T faces competition in content delivery and streaming media from the likes of Akamai and Digital Island, each of which has created substantial server networks. While these companies express their strength, in part, on the number of servers in their network, "we're not going to get into server figures," said Mike Jenner, vice president, for AT&T's global IP network services. "They're essentially a meaningless number."

Rather, AT&T and their partners look at their control of bandwidth, from the originating computer through their $100 billion network of OC-48 and OC-192 cable to end-users, as the measure of their ability.

"For streaming in particular, you need a different kind of architecture," said Martin Tobias, founder and 'Minister of Order and Reason' for Internet media infrastructure services company Loudeye.

Low bandwidth is only part of the issue, he says. When consumers download video, and the data packets come in at an uneven rate -- perhaps by traveling through multiple networks to get to the destination -- people suffer from buffering problems. Images stutter.

"You have to get sustainable bandwidth here," he said. "The packets have to be delivered at a standard rate."

Control lets AT&T smooth out the data transmission and help mitigate buffering issues, Jenner said, noting, "we believe it's very important to have control of the underlying network."

AT&T, in Basking Ridge, New Jersey, can be reached at +1-908-221-2000 or http://www.att.com/.

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