Serial entrepreneur to take on Comcast with cheaper Internet

NEW YORK - Chet Kanojia, the tech entrepreneur who set off one of the biggest legal battles in recent television history with the Aereo streaming service, unveiled a new wireless venture Wednesday for high-speed Internet services to challenge Comcast Corp. and others.

At a news conference near New York's Madison Square Garden, Kanojia said his Starry Inc. venture will offer lower monthly broadband prices, gigabit speeds, and no data-consumption caps.

"There is an insane amount of available spectrum, and on top of that there is unlicensed spectrum," said Kanojia, pooh-poohing the notion that he wouldn't find spectrum capacity for Starry.

The capital investment to expand his network, Kanojia estimated, will be about $25 per home because of his low-cost wireless technology, which rides on narrow-wave high-frequency spectrum that until now has been deployed mostly for tower-to-tower, or point-to-point, data communications.

By contrast, a wireline Internet provider such as Google Fiber or Verizon has to dig up roads or string fiber-optic wires on telephone poles and can spend about $2,500 per home, Kanojia claimed.

Comcast, the nation's largest residential Internet provider, will be the first of the telecom incumbents Kanojia will target as Starry rolls out in the Boston area this summer.

Asked whether he would price Starry's Internet service below Comcast's stand-alone Internet service, Kanojia smiled and flashed two thumbs up, indicating he would try to beat Comcast's price point, which he set at about $85 a month.

Boston would be a good market to launch, Kanojia said, because Verizon has skipped over many towns with its FiOS Internet business, leaving the high-speed wireline Internet business to Comcast.

Asked about the lawsuits that forced him to liquidate Aereo in late 2014, Kanojia said: "I don't see a legal problem, but this will be a huge execution issue."

He added that he has approval from federal regulators to experiment with high-frequency spectrum for the Starry service.

Indeed, Starry uses mostly untested technology, and the company will have to install the wireless base stations, similar to how Verizon, AT&T, and other mobile companies build out their networks with cell towers.

Consumers will be asked to self-install Starry's coffee-mug-sized receivers on their homes, mostly on the outside of windows. Another device, the size of a waffle maker, will need to be inside the window.

As it does for satellite TV providers, rain could degrade the Internet service, a company executive said, and it probably won't work in tropical areas. In addition to the broadband service, Kanojia on Wednesday unveiled a sleek touch-screen WiFi router for homes to familiarize consumers with the Starry brand.

Starry officials say the new venture is backed by "tens of millions of dollars" from investors that include Tiger Global, KKR, and Quantum Strategic Partners.

The company now has about 50 employees, including about 25 transfers from Aereo, which Kanojia launched in 2012. Its technology grabbed local ABC, CBS, NBC, and Fox television signals on tiny antennas, stored the TV content briefly on computer servers, then individually streamed the content over the Internet to subscriber smartphones and tablets.

Kanojia, who was raised in Bhopal, India, sold his first venture to Microsoft. Many considered his Aereo service cutting-edge for its streaming applications.

But broadcasters blasted Kanojia for stealing TV signals and sued to stop him. Aereo raised about $100 million in venture capital, and longtime TV executive Barry Diller supported the venture.

Judge Denny Chin of the U.S. Court of Appeals for the Second Circuit called Aereo's technology a "sham" and a "Rube Goldberg-like contrivance."

In a lightning-fast time - two years - the Aereo case made it all the way to the U.S. Supreme Court. By a 6-3 decision in June 2014, the high court said that Aereo was a "cable-like" service and couldn't simply grab the TV signals off the air and stream them over the Internet.

The firm had to negotiate financial terms with broadcasters. But doing so would force Aereo to raise its monthly rates and undermine its business model.

So Aereo filed for bankruptcy protection in November 2014. At the time, Kanojia said he would be back, and, on Wednesday, he said that even while he was running Aereo he was thinking about a broadband service like Starry.

bfernandez@phillynews.com

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