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Michael Cunnyngham has seen the future of television. And he wants to be the person who delivers it to you.
Hes built a massive, nationwide fiber-optic network — the first of its kind, he believes — that can deliver on-demand, DVD-quality full-screen video over the Internet today.
“The first time I saw the Web, I said, This is where television on demand is going to come from, ” Cunnyngham says. “People are going to decide what they want to watch, when and where.”
If youve never heard of st3.com, youre probably not alone. The Chattanooga, Tenn., newcomer is virtually unknown in the industry, and its just launching a new sales and marketing effort this month. Cunnyngham, st3s chairman and chief scientist, and a wireless network engineer by trade, founded the company in 1997.
So heres what the company does: St3 operates its own Internet Protocol backbone network capable of sustaining as many as 200,000 simultaneous broadcast-quality video streams in the continental 48 states. Currently, its network comprises 24,000 fiber circuit miles, provided primarily by Broadwing and WorldCom. By the end of June, st3 expects to be at 34,000 circuit miles. In most sections, the network runs at OC-12, or 622 megabits per second, and in certain stretches at OC-48, or 2.5 gigabits per second.
“We are the first company to operate a top-tier network with the purpose of delivering video at very high quality,” Cunnyngham says. “I can deliver something that looks like television over a DSL connection.”
St3, with headquarters that sit on the banks of the Tennessee River, uses the network services of sister company NextLEC, a bandwidth provider also founded by Cunnyngham. St3 gains two competitive advantages by operating its own network — one economic, the other technical. In a nutshell, Cunnyngham claims he can provide streaming media services for roughly one-third what his competition charges — and at higher quality. “The disadvantage,” he notes, “is that you have to spend a lot of cash before you can go into production.”
Exactly how much cash it has taken to build the st3 network is something Cunnyngham declines to specify. He says only that it took “many millions of dollars.” Privately held st3 has received funding primarily from individual investors. In addition, Broadwing has a significant equity stake in the company.
Cunnyngham says the design philosophy behind st3s network isnt much different from that of a highly reliable two-way paging network — both require at least 99.99 percent uptime. “We started from a presupposition on my part that any sustainable Internet video had to have the same reliability as your phone or cable service,” he says.
Beating the Big Guys
St3s big selling point is that its network design is radically different from those of its competitors. Other companies that deliver streaming media and rich content, such as Akamai Technologies, Digital Island and iBeam Broadcasting, essentially have “island” architectures in which they distribute content over the public Internet to servers in multiple points of presence. St3 also distributes content this way — it currently operates distributed caching servers in 25 POPs — but because it runs as an independent network, Cunnyngham says, it is able to make use of some unique policy-based load management techniques.
“Our delivery vehicle is only available if you have a top-tier autonomous network,” he says. “The other guys have no control over what happens in the Internet. Since we are a network, we can use information we gather about the state of our network to send out route information that changes other [Internet service providers] routes to us.”
Its fiber-connected network, according to Cunnyngham, lets st3 deliver streaming media at sustained data rates of up to 50 Mbps — five times as fast as standard Ethernet networks. Customers multimedia content is stored in st3s central media asset system, which has 4 petabytes — more than 4,000 terabytes — of online storage, which translates into roughly 600,000 hours of video.
In addition to its raw capacity, st3 claims it is able to charge less for streaming media services than competitors because it doesnt pay for Internet bandwidth. Cunnyngham says he thinks most streaming media hosting services are grossly overpriced. St3 will charge $3,000 per month for the same level of service for which Akamai would charge $8,000 per month, he says. Akamai executives declined to comment.
“The other guys pay for every bit they send,” Cunnyngham says. “We own the network, so we dont pay for the bandwidth. We have substantially lower transit and bandwidth costs.”
So far, st3 has lined up only a few customers for its services, but now plans to pursue sales to streaming media companies in earnest. St3s existing customers include eMotion, a media management services company for which st3 is hosting 50,000 hours of stock footage to be available at eMotions FootageQuest.com site. Later this month, st3 will provide bandwidth and encoding services to Acoustic Box Office, an Internet radio site and live event Webcaster, to stream Merlefest 2001, a four-day bluegrass concert in Wilkesboro, N.C.
Jerry Venable, president of Acoustic Box Office, says the Merlefest event will be his most ambitious live broadcast ever, offering up to 80,000 paying subscribers either a 56-kilobit-per-second audio stream or a 250-Kbps video stream.
“When you start looking into this type of aggressive implementation, you need to have some really strong delivery capabilities behind you,” Venable says. The companies partnership is mutually beneficial: St3 has invested an undisclosed sum in Acoustic Box Office.
St3 plans to court potential customers in a variety of industries, including TV news organizations, movie studios and companies serving the business education market. But Cunnyngham emphasizes that st3 is providing only the plumbing. “Basically, you can think of us as the railroad and the warehouse,” he says. “We never take ownership of copyright. Were merely a facilitator to get it to the customer.”