Anyone who attempted to watch President Clinton's videotaped testimony knows it. Or if you were one of the million or so who tried to watch a live birth on the Internet, you know it. The Internet and video don't mix very well.

Part of the problem is bandwidth. There just isn't enough of it. But a Santa Clara, Calif.-based start-up claims it now can solve part of the bandwidth problem by bypassing the most congested points on the Internet backbone.

iBeam has developed a system that uses satellites to transmit audio and video streams from content providers' servers directly to Internet service providers. The MaxCaster, which was unveiled at last month's ISPCon in San Jose, consists of a server, a satellite downlink and a Layer 4 switch. The service, which launches in November, will use Hughes Network Systems' DirecPC satellite platform and networking equipment from Foundry Networks.

"The Internet infrastructure was never designed for audio and video," said Jeff Bixler, vice president of sales and marketing for iBeam. "As access gets better, the bottleneck is going to be in the backbone."

In the iBeam plan, ISPs paying a $495-per-month subscription fee are provided with a downlink station and a switch, which are connected to local points of presence. The result is that ISPs can locally cache high-demand content or provide a direct link to content providers that bypasses the Internet backbone. ISPs also are expected to put up a $15,000 start-up fee, although the company said it could finance that if needed. In fact, according to Bixler, iBeam is gearing the service toward smaller ISPs by capitalizing much of the equipment.

To recoup some of that revenue, iBeam envisions ISPs providing local ad insertion whereby ads from merchants are inserted at the local level and incorporated into the audio or video streams.

Although unique to ISPs, the economic model of local ad insertion has worked for several years in the cable TV industry. In fact, many cable operators rely on such revenue to maintain local systems. Initially, though, iBeam is marketing the system as a way for ISPs to eliminate the need for additional T-1 or T-3 lines.

"They're looking for revenues to offset theses larger usage trends," said Bixler. "ISPs want new service offerings. We're the middlemen. Eventually, we think revenue from ads are going to be a big part in the survival of ISPs."

For users on an ISP network implementing the system, bypassing the backbone means better-quality audio and video and faster access to content. For content providers, the system eliminates their problem of getting enough bandwidth over a backbone that is expanding quickly but remains relatively unregulated.

Indeed, the idea of locally caching frequently visited Web pages has become one of the hottest topics among ISPs. Inktomi, one of the larger providers of caching servers, said it sees the emphasis on bandwidth availability shifting from local networks to backbones. In the next version of its server, the company also plans to embed Progressive Networks' Real Media server, which gives local users faster access to streaming audio and video.

"Over the last six months, we've seen a shift in the mindset of the industry that the last mile is going to be solved," said Dennis McEvoy, vice president of development and support for Inktomi.

Although Inktomi is not following an ad insertion economic model, McEvoy said caching content certainly will open up several new possible revenue streams from ISPs. "We think of caching for data in the same way that we think of SS7 for voice. Once you put the [signal transfer point] in place, all of a sudden there were all these applications."