The next evolution of TIVO
Kalispell Firm offers Internet-protocol TV to phone companies
By Kristi Albertson
The Flathead Business Journal
A Kalispell-based communications firm is on the verge of helping telephone companies expand their services.
Auroras soon will be able to offer a triple-service package - cable TV, Internet and long-distance phone service - using Internet-protocol TV. IPTV transmits TV and video signals over any broadband network, be it copper cables or fiber optics.
Television is a market that telephone companies have tried to penetrate for years, but astronomical costs have prevented them from providing affordable video service. And when other communications companies began offering one-stop services, it looked like the beginning of the end for phone companies.
Auroras expects IPTV to make the difference.
IPTV doesn't mean "TV over the Internet," said Diane Smith, Auroras' chief executive officer.
Although the signal comes over broadband, customers watch it on TV sets, not computer monitors. A set-top box, similar to the device used by cable and satellite companies, will connect the television to the home's broadband line. Auroras will manage the headend facility in Atlanta, Ga., where the signals are aggregated, and telephone companies and other broadband providers will deliver those signals to individual customers.
IPTV was born out of telephone companies' need to compete with cable and satellite companies, said Steve Bukowski, chief operating officer.
"It started as a defensive play," he said. "They said, 'We need this, and we need this fast.'"
AURORAS IS poised to become the first company to make IPTV commercially available. They expect to go public in early 2007, and will initially offer anywhere from 120 to 200 channels, Smith said.
The actual number will be determined by consumer demand, and the company is still in negotiations with some networks. So far, Auroras has signed agreements with a number of channels, including Starz Entertainment, Fox News Channel, the Outdoor Channel, the Sportsman's Channel, Trinity Broadcast Networks and Playboy TV.
Auroras was founded a little over three years ago, by Smith and Mike Kazmier, now the company's chief technology officer. Kazmier's background is in systems and network engineering, and Smith has a long history in the communications business.
Today, Auroras has 15 employees, 11 of whom work in Kalispell. Others work in Long Island, N.Y., Seattle, Los Angeles and Austin, Texas.
"Because of the technologies that we use, we can be located anywhere," Smith said. "We could be located anywhere, and we all picked here - and we're thrilled to be here."
IPTV is Smith's fourth start-up industry. Before moving to the Flathead Valley, she was in on the ground floor of wireless technology and the early years of emerging long-distance telephone competition.
"Start-up industries are more complicated than start-up companies," she said, explaining that while a company has one focus, an industry pulls together a number of technologies to achieve a single focus.
In IPTV, one of those technologies is MPEG-4 compression. Traditionally, small files have meant small photos. Blowing up a low-resolution photo resulted in a poor-quality, pixilated image. MPEG-4 technology compresses data into tiny files that don't lose their quality when they're resized.
This means people with high-definition TVs will still receive sharp images. And the smaller the file, the more files can be sent through over an Internet connection - which means IPTV providers can deliver as many channels as a viewer wants.
Cable and satellite technology use a broadcast format, in which all of the information is sent out at once. Viewers may only pay for a certain number of channels, but all of the channels are still there, even if they can't be accessed.
IPTV is multicast, or selective. A viewer selects which channel he wants to watch, and only that channel comes up. Customers can watch what they want when they want it.
"The huge implication is that I just ask for what I want. Everything is on demand," Bukowski said. "It's the next evolution of TiVo."
The multicast format means less data is traveling through the Internet connection. With less data arriving in smaller sizes, IPTV is a good fit for rural telephone companies' broadband systems, Smith said.
"We think rural telcos may lead the way on this one," she said.
Auroras has already partnered with 3 Rivers Communications in Fairfield. In June, the company demonstrated the MPEG-4 technology using 3 Rivers' copper cables. Auroras conducted a similar test in Iowa among a group of small phone companies.
In Iowa, the people from the phone companies came to the receiving house to watch the video launch.
"It was like Orville Wright taking flight," Bukowski said. "It's a huge deal for people with copper wires in rural areas to find out they can put more in that copper wire than they have been able to historically, and that that content is high quality and secure."
"It's a big deal for them when they've been trying for two decades to figure out a way to get video."
Because IPTV runs on a broadband network, video is only the beginning, Smith said. Instead of purchasing a disk for video games, a customer can call up the central office, have a game sent to his set-top box and play with others connected to the network. That connection also means viewers will be able to surf the Net while watching TV. While watching a football game, for example, someone could call up stats on one of the players.
"The next generation of set-top boxes will have browser capability," Smith said. "The telephone architecture is well-suited for this."
The goal is to make the technology affordable and easy to operate, she said. A lot of complicated technology is involved to make IPTV possible, but if Auroras is successful, viewers will only see the end result.
"Our job is to make it look easy," she said.
On the Net: http://www.auroras.tv
Reporter Kristi Albertson may be reached at 758-4438 or by e-mail at kalbertson@dailyinterlake.com