Digital Data Firm IBlast Strikes Deals

A dozen of the nation’s largest broadcasting groups are investing in a new company that will compete against cable and telephone companies in delivering data at high speeds to home computers.

IBlast Networks on Tuesday said it had struck exclusive agreements with 143 local television stations owned by Cox Enterprises, Tribune Co., Gannett Co. and nine other broadcasters to use up to half of their digital spectrum for transporting data, including movies, games, music-on-demand and other video material.

Together the stations reach more than 80% of U.S. households. IBlast said it hopes to sign up other groups to extend its reach to 95% of households when the service launches next year.

The new company represents the most ambitious effort yet by the nation’s broadcasters to use their new digital capacity to compete in the Internet business. It could also help them underwrite the huge expense of converting their outdated analog systems to digital technologies under a government mandated plan that is to be completed by 2002.

IBlast will charge a fee for transporting data to home computers and will split the revenue with its broadcast partners, which currently control more than half the company’s equity.

“Our biggest mission is to create a common standard so that many companies can build devices to receive our signal,” said Michael Lambert, IBlast’s co-founder and chief executive.

Lambert, a Los Angeles-based owner of five TV stations, modeled IBlast after another station consortium he formed years ago to jointly develop and produce programming for mid-sized station groups.

IBlast’s president is Ken Solomon, a veteran TV executive who has served as president of Universal Television and USA Networks’ Studios USA Television. Oliver Luckett, co-founder and chief technology officer, was until recently a senior vice president at Digital Entertainment Network.

Consumers will need a special antenna or a computer equipped with a digital receiver to receive the data, while stations will need to spend roughly $500,000 to retrofit their transmitters for data broadcast. Ultimately, content will be available through wireless devices such as Palm Pilots, cellular phones and MP3 devices.

Although the IBlast system can broadcast huge files of data cheaply at high speeds to multiple parties without bogging down the network, consumers must use a slow telephone return path. That means the technology will not be suitable for certain applications that require quick return speeds, such as some interactive games.

But IBlast says it can offer a cheaper and more efficient way to deliver movie trailers and other content that is difficult to stream or download from the Internet. Video streaming is still problematic on the Web because network capacity limits how many users can view a given stream at one time.