CyberAir Executive Summary

The following executive summary was written in April, 2003, for CyberAir Communications, Inc., a Los Angeles-based network technologies firm. The Executive Summary was written for a 100-page sales proposal outlining the details of the CyberAir Network and CyberAir Technology business models.

The sales proposal had been completed prior to my working on this portion of the document. The proposal included a previous executive summary that executives at CyberAir were not satisfied with. They hired STS Professional Writing Services, a Los Angeles-based communications firm, to write a new summary based on the old one. STS, in turn, hired me to do the writing job.

[NOTE: In some cases below, passive voice was deliberately used to highlight certain ideas and features.]

 

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"CyberAir has assembled an unparalleled suite of broadband and network technologies designed to deliver the applications of the 21^st century to businesses and consumers. The impact of these applications will revolutionize many industries and lead to advances that will benefit mankind. In order to introduce this suite of technologies, we have developed two complementary business models that maximize the resources of manufacturers, network providers, service providers, and content owners through strategic alliances."

James W. Truher – Chairman, CyberAir Global Networks Advisory Board
- former General Manager and Area Vice President of AT&T Bell System

 

CyberAir Communications, Inc. (CyberAir) is a privately-held Delaware corporation, established in 1998. CyberAir is headquartered in Los Angeles, CA, and CyberAir Technology Companies (CTC) are located in Oakridge, TN; Salt Lake City, UT; Huntsville, AL; Redmond, WA; Chantilly, VA; Minsk, Belarus and Novosibirsk, Russia. Through acquisition and licensing, CyberAir has secured the primary components necessary to deploy two CyberAir business models – the CyberAir Network and the CyberAir Technology business models.

 

The Cyber Air Network Business Model

The purpose of the CyberAir Network Business Model is to make available, through strategic alliances, the CyberAir Network, a new broadband convergence network utilizing CTC technologies. This network will deliver 8-10 Mbps of bandwidth to the home or business, and will include a revolutionary advanced set-top box controlled by a human interface with exciting never-before-available features. This model will begin to generate revenue in Q1 2005.

The goal of the CyberAir Network is to be the first reliable and cost-effective global network that provides true convergence. Convergence is the ability to simultaneously deliver multiple applications on a given platform—for instance, the ability to search the Internet for information while participating in a video-conference at the same time; or the ability to play video games with friends over the World Wide Web, while talking with each other using Voice over IP (VoIP), all on the same device.

In the past decade, high-profile companies have been engaged in the process of wiring the globe, via the installation of fiber optics cabling almost everywhere. Investors flocked to companies like Global Crossing and Level 3 because they believed that the payoff for this initiative would be huge, thanks to the world's insatiable appetite for bandwidth.

Unfortunately, the results have been less than expected. In most parts of the world, a tremendous amount of backbone fiber capacity remains "dark," or unused. One reason for this is that there has not been a corresponding growth in high-speed outlets that allow consumers and businesses to access and make use of this fiber optics backbone. Today, only a "privileged few" – that is, a few tens of millions out of the earth’s six billion inhabitants – have broadband Internet, quality telephony, and cable services. But even these devices are largely ineffective because they lack the sufficient bandwidth for convergence.

The problem of achieving convergence over the relatively slow connections that currently exist is known as the "Last Mile" problem. Cable, DSL, and satellite access all provide improvements over the standard dial-up capability, offering bandwidth from 256 Kbps to 3 Mbps in some cases. But because these access platforms are still bandwidth-constrained, they cannot deliver the killer applications that consumers would want. At the same time, no killer applications have been introduced that would cause consumers to have to have existing broadband solutions.

The solution to the Last Mile problem involves getting the bandwidth and associated capability that we need from the high-speed backbone into our homes, schools, and offices. Once inside the home or office, the end-user device that allows the consumer to access the high-speed backbone must have convergence capability. Finally, the content that is communicated over the backbone and through the end-user device must be protected from piracy, or content providers will not be attracted.

In recent years, CyberAir's Technology Acquisition and Development division has focused on creating technology solutions to address all of these problems. To this end, CyberAir has created an extraordinarily lucrative opportunity with the development of the CyberAir Network.

The past two years have seen extraordinary advances in expanding the capacity of existing fiber via DWDM and other technologies. The massive fiber backbone capacity that is already in place is not part of the problem, but an essential part of the solution. The deployment of the CyberAir Network will consume significant quantities of this excess fiber capacity and will thus be the salvation of the fiber infrastructure companies.

To deliver true convergence requires a minimum of approximately 8 Megabits per second (Mbps) bandwidth to the end-user receiving device. 8 Mbps allows us to more fully utilize technology that exists today, and to do so at lower price points than we pay today. We can deliver high-speed Internet access, Voice Calls (VoIP) (where in-network calls are virtually "free"), Movies-on-Demand, Video Conference Calls, and many other features. The combination of these in the new advanced-feature set-top box, the Media Center Boss (MBoss©), along with the new human interface that controls the MBoss©, are the killer applications that the industry is looking for to spur growth once again.

Addressing the "Last Mile" - CyberAir has a portfolio of technologies with the potential to leap-frog the global telecommunications, IP, and cable network community by cost-effectively delivering high-speed two-way wireless or wired data transmission for integrated services. This is made possible by utilizing a combination of Radio Frequency (RF) and Optical Free Space (OFS) delivery systems. CyberAir RF and OFS technologies deliver more bandwidth at greater distances than technologies deployed or being developed by other companies. CyberAir also has technology that enables the delivery of high-speed broadband over existing TELCO industry copper wire infrastructure between and within buildings. Furthermore, similar technology will provide high-speed broadband over the coaxial cable infrastructure of the Cable TV industry.

End-user device - To address the convergence issue, CyberAir has also acquired additional technologies that will help pull the Last Mile solutions into the marketplace. The key is the end-user device that will receive the bandwidth – the CyberAir advanced set-top box or Media Center Boss (MBoss©). The Last Mile solutions and the MBoss© will lead to an explosion in usage of online services and facilities – and demand for new content, which will then generate significant new revenue to service and content providers.

Human Interface - Traditionally, PCs are operated with keyboards that have around one hundred keys and a mouse. Televisions are operated by infrared remote controls with limited function. These methods are widely used, but the vast majority of the world has yet to fully master these devices and many users never bother to learn more than basic operation. CyberAir bridges these problems by enabling the MBoss© to be controlled by human speech and natural body movements. CyberAir has acquired the exclusive rights to an innovative speech recognition Operating System (OS)/Graphical User Interface (GUI) and new 6D sensor technology, which allow natural human movements and the sound of your voice to operate the MBoss©.

Copy Protection – Content owners will not be motivated to invest in developing new creative content or distributing any of their content over the CyberAir Network unless we can protect that content from piracy. One of the CTCs has developed a solution for copy protection. This is essential to the success of the CyberAir Network Business Model.

The following is a short example of the results of successfully integrating all of these pieces – convergence, Last Mile, end-user device, human interface, and copy protection – into one solution.

While watching a movie on TV, you notice that the lead character has a really nice jacket. You say, "Where did he get that jacket?" - and a second window opens up in the television linked to a web page where the jacket is for sale. You trace your index finger in a circle in the air, and the image of the jacket rotates, showing you every side. You decide that you want to buy the jacket, so you say: "MBoss©, purchase this item, bill it to VISA, ship it FedEx overnight." The MBoss© replies – and yes, the MBoss© does speak – "One jacket from website X, model number Y, color blue, size 44 L, overnight shipping to the office address, use VISA card #1. Is this correct, sir? Confirm, yes or no, please?" You say, "Yes," and return to watching your movie. Your new jacket is delivered the next day.

With the CyberAir Network and the MBoss©, the killer applications are here! Video conferencing from the comfort of your home with distant relatives will not only be possible, but it will be affordable to everyone. Sophisticated gaming over the Web will become much more intense with the deployment of higher bandwidths, and with the introduction of various types of gaming control equipment utilizing 6D sensor technology and speech control technology from CyberAir. Any imaginable type of Content will be at your fingertips—or more accurately at your voice command, as all of the operations of MBoss© will be controlled by your voice.

Deploying the CyberAir Network—The CyberAir Network Business Model describes the deployment of the CyberAir Network as an integrated global network, with local partners in each country or territory. In each territory, CyberAir will establish a Joint Venture Operating Company (JVCO) with local partner(s) and sign a license that provides each JVCO with the exclusive right to deploy CyberAir Network Equipment and Services. The local partner may contribute their relevant existing network infrastructure to the JVCO. CyberAir then arranges, through worldwide peering agreements, the connectivity between the various JVCOs and existing IP and telecommunications networks. Detailed explanation of the CyberAir Network Business Model is provided in Section 3.0.

The CyberAir Network will be created through a combination of sublicensing the technologies controlled by CyberAir, and entering into joint ventures with global long-haul fiber network companies and telecommunications, IP, and cable network operators worldwide. In addition to providing a global network and the technology needed to enable convergence, CyberAir will also offer a complete range of value-added services through strategic alliance partnerships.

The CyberAir Network rollout will be accompanied by tremendous buzz and will act as a pull for service providers (providing they are JVCOs) to add new customers and up-sell their existing customer base. The success of the initial JVCOs also acts as a pull for CyberAir to attract new local partners for other JVCO territories – so they can become the exclusive CyberAir Network JVCO for their territory.

The planned initial deployment of the CyberAir Network is scheduled for Q1 2005. CyberAir projects that within 5 years, the JVCOs in the CyberAir Network will have a minimum of 30 million subscribers worldwide. This can be achieved without going beyond the more affluent nations that already have considerable long-haul fiber network infrastructures in place.

Convergence, Last Mile, end-user device with human interface, and copy protection are the opportunities addressed by the CyberAir Network Business Model. The potential return for a successful solution is almost unimaginable. The billion-plus Internet, TELCO, and Cable TV subscribers in the world today form the markets that the CyberAir Network will penetrate and dominate by providing superior services at a lower price.

 

The CyberAir Technology Business Model

The purpose of the CyberAir Technology Business Model is to make available technology from the CTCs in stand-alone and non-network applications. These applications will begin to generate revenue in CY2003.

The CyberAir Technology Business Model is complementary to the CyberAir Network model and maximizes the benefits to Strategic Partners with a truly win-win formula. Basically, this business model illustrates how we maximize our investments in technology by deploying applications of CTC technology outside of the CyberAir Network. All of the CTC technologies are either patented or in patent-pending status.

Under the CyberAir Technology Business Model, we will begin deploying standalone products or services based on application of CTC technologies that are ready for market in CY2003. In addition to royalties and license fees, CyberAir will also have significant equity positions in most of the CTCs. The following are just a few examples of CyberAir Technology Business Model opportunities being developed. Details are available in Section 4.0 and in Figure 10.

Walden Technology Source is a closely-held C corporation in which CyberAir is a majority shareholder. Walden is located in Salt Lake City, Utah. Walden partners with government research centers to filter, refine, and launch technologies that have been developed under a government funding umbrella, but which have not yet been made available to commercial markets. CyberAir has the right of first refusal for all technology sourced by Walden from the National Labs.

The first subsidiary created to implement the Walden plan is Tarallax Wireless, Inc. Tarallax has a Cooperative Research and Development Agreement (CRADA) with the Department of Energy. Tarallax has identified four core wireless technologies for development. Each of these technologies will require specific research and development efforts, but will also be complimentary and synergistic. The technologies fall within two general areas, communications and asset tracking.

Tarallax is developing chip-based Radio Frequency Identification ["RFID"] products for use in supply chain logistics and asset monitoring. The initial joint development effort is directed at monitoring and locating marine shipping containers. The current agreement calls for Navigational Science, a South Carolina corporation, to support the development with $1.25 million, in exchange for an exclusive license to port and shipboard container tracking and monitoring.

Navigational Science will also pay to CyberAir 4% of their gross revenue and a royalty of 7%, based on sales of the necessary hardware components licensed from CyberAir. CyberAir will in turn pay 2% of the gross revenue and 5% of the license royalty to Tarallax, retaining 2% of the gross revenue and 2% of the royalties. The Tarallax transaction has a second closing that will result in an increase of the CyberAir equity position from 50% to 95%. The remaining 5% equity is held by UT-Batelle, LC - the ORNL Lab Manager.

Targeted opportunities include building monitoring, automation of heavy manufacturing and distribution, and medical patient monitoring. Currently, Tarallax has contracted to jointly develop shipping container tracking and monitoring. Additional efforts are underway to participate in support of two proposals requested by agencies of the Department of Defense, including one for communications networks and another for personnel monitoring. These proposals involve the combination of High Orthogonal Gain (HOG) technology with aspects of the 1451.5 technologies, and also with the capabilities of the Innalabs 6D Sensor described below.

Innalabs, Inc. is a Russia-based technology firm that specializes in turning promising inventions of Russian scientists into final products with great market potential. Innalabs acts as an incubator not only for Russian government-sponsored labs, but also for private laboratories and development facilities throughout Russia. Many industry leaders in the United States, starting with Boeing, Intel, and Motorola, have opened research centers in Russia, primarily because of the high education level of Russian scientists and low development costs, which lead to reduced overhead costs and quicker time-to-market. Innalabs has been operating as their development center in Novosibirsk since July, 1999. The center has already produced positive results, namely in the development of several products for which Innalabs has secured patents in the USA.

One of Innalabs products under development is the 6D Sensor. This device enables the precise definition of the position of an object in space and its direction with respect to a chosen coordinate system at any moment of time. The 6D sensor technology is defined in more detail later in this document.

RFID is a method of communications used primarily at checkpoints – entrances, gates, ship loading and unloading points, border crossings, etc. Sensors attached to any particular object that is being tracked, like a container on a ship, train, or truck, can provide valuable information about the object. For instance, the 6D sensor can act as an accelerometer and can tell if a container was dropped, moved too fast, opened, or was handled in an inappropriate manner. With the right combination of sensors, 6D technology can tell the approximate location of a container on a ship or in a warehouse, and whether the container contains humans or dangerous materials. The RFID device associated with the sensors then communicates information from the sensors to a reader device or console, allowing the container to be easily identified, located, and diagnosed. There are many other applications for 6D sensor technology in combination with RFID communications devices—for instance, measuring stress and vibration on moving parts in machinery and issuing an alert when maintenance is needed.

The 6D sensor technology could also be used in emergency location services for pinning down the location of emergency 911 calls originating from cell phones. Another interesting application of the 6D sensor technology is as a gaming interface, which would allow the user to control action using real-life motions from a free-space control device with 6D sensors built into it – like a steering wheel or a glove – rather than pushing buttons to move objects up, down, or sideways. This application could revitalize the gaming industry, as hundreds of previously-released games could be launched again, but this time with 6D interface capabilities that intensify the user experience.

Antibody Solutions is a Minsk, Belarus-based company that has put forth a seven-year work effort in the development of security software technology. It employs an international team of scientists and specialists in cryptography, led by Professor Valentin Michtchenko. The team was focused on creating elaborate new multi-channel cryptographic systems, based on super long keys and using super long passwords, to fix the growing weaknesses of current standard encryption algorithms – both symmetric and asymmetric. The purpose was not and is not to eliminate these standard algorithms, but rather to place them in a protective unbreakable shell. The user level application of the two-core patented encryption algorithms uses multiple channels and super long keys from 10K to 1M bits.

The aim of the technology is to protect intellectual property (IP) and personal or business secrets against ANY attempts to steal them, and to provide information to authorized official bodies only if it is legally required and only under condition of notification to the clients. The value of current encryption technology is decaying daily with the advent of everyday accessible computing technology. DES (Data Encryption Standard) and RSA both work with 56 or 512 bit encryption. In a society without computers, these standards may provide acceptable standards of security.

In the real world, computers and computers linked to others in clusters and networks can easily break 512-bit encryption. New encryption standards that are currently being introduced in the world do provide users with a certain level of protection. But continuous advances in technology indicate clearly that the life spans of these new standards can be measured in years, not decades. Antibody Solutions products counter this trend. The copy protection software that CyberAir will use to protect CyberAir Network content from piracy is being developed by Antibody Solutions.

Conversay™ is a company that specializes in applying speech control to any application or platform. CyberAir has acquired exclusive access to ConversayÔ Speech Recognition and Control technology for all LINUX applications, as well as exclusive rights to the new ConversayÔ Operating System and Graphical User Interface for all LINUX and Windows XP applications and platforms. This will allow CyberAir to embed voice-control technology in the MBoss©--but the technology will also be used in cell phones, ATMs, games, and many other applications. It could especially be a benefit to handicapped people for special applications.

In summary, CyberAir has literally scoured the earth to compile a portfolio of solutions to the convergence problem. We have negotiated contracts with companies owned by or with access to some of the very best and brightest scientists and engineers on earth. This brain trust is the source of the CyberAir killer applications. CyberAir has a revolutionary and huge opportunity with both the CyberAir Network and CyberAir Technology business models. When combined and executed, these two unique complementary CyberAir business models will fundamentally impact mankind, while at the same time generating significant returns to our investors.

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