When you tune to a live program from the Guide, you instruct your assigned antenna housed at the Aereo data center to tune to the channel the show is on and pass the digital broadcast stream to your remote DVR. The DVR consists of several components that process the program stream and prepare it for you to stream it to your internet-connected device.
Your DVR records the program as you watch it, giving you the ability to pause or rewind the live stream. When you record, you record three separate unique copies of the show, each in a different bit rate optimized for different streaming conditions. The lowest bit rate file is ideal for streaming over 3G connections. The medium rate file will work well over most Wifi connections. The highest rate file is intended for really fast broadband connections.
While watching, you can choose the Video Quality on your device. If you select "auto" you will automatically choose the best bit rate for your current network conditions. When you are finished watching the show, your recorded files are removed from your DVR and do not count against your DVR storage space allotment.