Here is some of the info from Apple's HTTP Live Streaming Overview:
iPhone and iPad apps that send large amounts of audio or video data over cellular networks are required to use HTTP Live Streaming. [...]This could also account for the poor quality seen in many movie trailers (64Kbps is half of ISDN speed) and other video content that was streamed over 3G. AT&T could be throttling bandwidth on http streams to make sure the video traffic doesn't bog down it's system.
You must include a low quality stream of no more than 64 Kbps for your app to resort to when network conditions demand it, along with the higher quality streams you want to deliver to your customers when the network can support it.
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