Though many companies have tried to develop technology that would help deliver rich media content and video-on-demand services to Internet users, the promise remains a pipedream.

Aside from myriad copywrite issues that are certain to come up, a major problem facing online content delivery, experts say, is Internet congestion in the middle mile, and bad last-mile connectivity. Attempts by Microsoft and RealNetworks to deliver TV-quality video streams to a consumer’s desktop have resulted in interruptions and broken streams. One company, Laguna Hills, Calif.-based EdgeStream, promises to change all that.

EdgeStream was founded by Randy Chung — the inventor of IDE, a single-disk interface standard that is on 100 million computers worldwide. The company promises to deliver DVD-quality movies to broadband Internet users with the help of its proprietary software, “Internet Congestion Breakthrough” (ICB) transport technology”.

The Technology

ICB is a bottleneck-resistant software platform that bypasses Internet congestion in the middle mile to enable the delivery of TV and DVD-quality streaming audio and video to broadband subscribers.

“It is the next generation of content transportation technology,” declares Rajeev Sehgal, EdgeStream’s vice president for business development. Sehgal says EdgeStream can deliver full-length feature films and DVD-quality content anywhere in the world from server sites in Los Angeles, Philadelphia and Dallas.

“We have devised a technology that is resistant to Internet congestion,” says Vinod Sodhi, CEO of EdgeStream.

The technology overcomes four problems facing streaming over the Internet today — poor quality, minimal coverage, poor distribution and high cost, according to Sodhi. With the help of intelligent client software that uses continuous routing optimization, “[the technology] will enable the highest quality of streaming, with a global footprint,” he says.

The client software is a plug-in that is compatible with RealPlayer and Windows Media Player. A plug-in for Apple Computer Inc.’s QuickTime video player will become available soon.

ICB’s main selling point is its ability to bypass Internet congestion in the middle mile, a problem that has affected many of EdgeStream’s competitors, including Digital Island and Akamai.

Akamai’s technology, for example, tries to overcome the problem by locating servers at strategic points of presence (POPs). Akamai’s network comprises 12,600 servers within over 1,000 networks in 66 countries, enabling clients to distribute their Web content worldwide.

Akamai believes that the nearer a server is physically to a user’s computer, the quicker content will download. Though Akamai’s technology is a step in the right direction, it cannot avoid Internet congestion altogether, Sodhi claims. “Akamai and Digital Island have thrown in the towel” on trying to solve the congestion problem, he says, though clearly Akamai would obviously disagree with that statement.

Sodhi says EdgeStream’s technology eliminates the need to place servers at strategic geographic locations. EdgeStream has one patent to its name and is in the process of filing five more. The company has not announced any customers yet, but many are in the pipeline, says Sehgal.

The Market

Currently, the streaming market is worth $70 million. A recent study by J.P.Morgan H&Q estimates that the streaming service revenue will grow from $60 million in 2001 to $5 billion in 2005.

EdgeStream will not go into content, says Sehgal. Instead, the company will capitalize on the emerging opportunity by licensing its technology and by letting the content and technology providers build on it. “We don’t want to deliver content, we just want to enable it,” he says. Though the content-streaming industry has been victimized by a lot of hype, Sehgal believes that the market will ripen within a year.

Both Sehgal and Sodhi view the American market with skepticism, as it adopts technology too late. They say that the Far East is far ahead in terms of adopting broadband technology. According to Sehgal, 65 percent of households in Japan have broadband connections. As opposed to $49 for a 256 kbps DSL connection in the U.S., Yahoo Broadband in Japan provides a DSL connection for $17 per month at speeds of up to 8 megabits per second.

Surviving

With just 10 employees working from its Laguna Hills office, EdgeStream has high aspirations for the future. The company is holding itself together on a $2 million investment made mostly by family and friends of the company’s employees. Realizing the importance of every penny spent, employees sometime refuse to take salaries. “In the end, we’re all in it together. Employees refusing to take salaries is strong evidence of commitment,” says Sehgal.

Sehgal hopes that the employees’ commitment will translate into success. “We’ve gone through tough times. Success will come,” he says.