There has been an unfulfilled promise that the Internet would allow studios and other content providers to reach billions of consumers directly and electronically. Internet economics and performance have blocked the fulfillment of this promise. Bandwidth costs, the last mile bottleneck and the fact that people do not want to watch movies on their PC all contributed their own issues.

Today we define a new era for the Internet. Advances in compression technologies have reduced bandwidth requirements and the real costs of bandwidth have been dropping by approximately 60% per year over the past six years. The result is new products that will allow digital video content to be streamed to the consumer's home entertainment system in full DVD and HDTV-quality. Most importantly, InterStream fixes the broken economic models that cause and encourage the performance and quality bottlenecks of "last mile" networks.

The Internet is a network of networks. These networks are typically interconnected at places known as Internet Exchanges (IXs), Network Access Points (NAPs), peering points or "meet-me rooms." In these exchange point locations, wholesale bandwidth agreements  or peering occur.  Known as "IP transit", the Internet's current wholesale bandwidth sales mechanism does not provide guaranteed service levels all the way into  the consumers living room.  When no bandwidth is being sold, but packets are simply being exchanged under an interconnect agreement, "peering" enables ISPs and content providers to reach a mutually beneficial arrangement.  However, peering agreements also don't scale to support the entire network. Not surprisingly, "best-effort" performance across these exchange points cannot guarantee a high quality experience all the way across the Internet into a consumer's home.

InterStream introduces an ability to escrow settlement fees for peering and transit services establishing a basis for an enhanced economic model based upon performance. Providers of premium applications and content will use guaranteed premium quality services all across the Internet, right to the living room. The InterStream escrowed settlement system increases both quality and demand for any of these premium Internet applications. Initially, InterStream will focus on high quality streaming video applications delivered to consumer PCs and 'net-top' boxes, expanding to other opportunities over time. The InterStream model benefits both providers and consumers; organically funds infrastructure expansion; and increases the availability of premium quality broadband Internet services.

First Mover Advantage

Just as VISA® and its member banks enabled inter-bank settlement system for transactions, the InterStream settlement strategy bands together companies that will benefit from enabling a high-quality Internet streaming delivery system. InterStream has developed technology, architectural specifications, business agreements and a legal framework to promote the implementation of a mediated streaming delivery system. InterStream, the motion picture industry and broadband service providers, will generate substantial transaction-based revenue for mutual benefit and profit from this economic system.

InterStream along with its partner company, Numetra,  will be the first to offer interconnection technology capable of delivering a high quality digital media experience to the consumer. This first-mover advantage will establish the largest base of commercial Internet exchanges capable of offering this service, and will create a significant barrier to entry for future competition.