The FCC (pdf), today voted to give airline passengers high-speed Internet connections while they fly. The unanimous vote means air travelers could be surfing the Web by 2006.
Left undecided was the issue of how many companies the FCC would allow, through an auction, to offer such services. Verizon Airfone maintains that letting one company handle the service would ensure the best quality.
“Our rules for the 800 MHz commercial air-ground service has been locked in a narrowly defined technological and regulatory box and have kept passengers from using their wireless devices on planes,” FCC chairman Michael Powell said in a statement after the commission s ruling. Verizon Airfone currently holds the license for the 4 MHz slot which it uses for its satellite phone and data service, but a new FCC plan would open up that spectrum to all bidders, resulting in at least two nationwide air-ground licenses.
CNN reports the rules for auctioning off a small piece of the public airwaves already used for air-to-ground phone calls is devisive.
It is believed by just about everyone involved that the so-called air-to-ground spectrum could be better used to carry both phone calls and high-speed Internet connections, allowing travelers to surf the Web and check their e-mail, relatively cheaply, at 30,000 feet.
Eventually, flyers should be able to use cell phones to make and get calls in the air using the same frequencies. But that will take additional regulatory action by the FCC, a process the agency will also start at Wednesday’s meeting.
On one side of the debate is Verizon Airfone, the unit of Verizon that provides the phones in the seat backs of about 1,500 of the nation’s jetliners. It argues that as the FCC restructures air-to-ground spectrum, it should give exclusive rights to one bidder.
“We believe the only way to provide a robust service is to have an exclusive license,” Verizon Airfone President Bill Pallone said. “If you have two people sharing the license, frequently the service will slow to a trickle or the plane will be out of touch completely.”
But other companies argue that the spectrum is big enough to divide up to four ways, and that it’s crucial that the FCC mandate at least two licenses to ensure competition.
On this side of the issue: several airlines and Boeing Connexion, which already offers a more expensive satellite Internet service that is just gaining a toehold, mostly on wide-body jets used for international travel. Also on this side is AirCell, a closely held firm that already provides air-to-ground communications for private jets.
“Having a single license is bad public policy approach, it’s bad for passengers and bad for the airlines,” said AirCell CEO Jack Blumenstein
What’s clear is that broadband access is easier and cheaper to provide from the ground than it is using satellites, as Boeing is already doing. Not only is air-to-ground broadband equipment less expensive, but it’s far lighter, an important consideration for airlines concerned about fuel costs.
Even after Wednesday’s meeting, it could take until this time next year to determine who is the winning bidder.
The FCC appears to be leaning towards auction rules that would allow bids for an exclusive license or for competitive licenses, signaling there won’t be a final decision until the auction is complete.
But Aircell’s Blumenstein and others on his side argue that people bidding for a possible exclusive license could drive the bidding sky high. Verizon Airfone’s Pallone said the way to go is to have the FCC move ahead with a single license auction for this part of the spectrum.
“We are not in favor of monopoly, we are not anti-competitive,” he said. “But the answer isn’t to debilitate the service so drastically that no one wants it. The answer is to have enough spectrum for everyone to provide service.”
But the part of the spectrum that Pallone said should be considered for a competing service is already being considered for expansion of normal ground wireless service, an FCC staffer told CNN/Money.
Ground-to-air stations, at $80,000, are cheaper then satellite links. Boeing charges around $500,000 for Connexion while Tenzing (using the Inmarsat satellite gear) runs $100,000 – $200,000. Boeing provides a 5Mbps shared downstream and 1Mbps shared upstream. Vodafone and Connexion will jointly trial in-flight Wi-Fi next year. Meanwhile, Tenzing’s system will speed up next year with a new Inmarsat satellite – if it doesn’t get blown away by space weapons.
