Misreporting abounded today about the FCC's air-to-ground wireless spectrum decision: What really was decided in order FCC 04-287? That 4 MHz in the 800 MHz band designated for commercial air-to-ground use will be auctioned. More on how the auction will be decided in a moment.

Reports were all over the board in describing the decision, however, partly because of the way in which the press release was written. If you don't know spectrum, as many business reporters still do not, then you can easily misunderstand what was covered.

Many articles stated that the decision would allow Wi-Fi on board planes. But that decision was made years ago, and is why Connexion by Boeing is allowed to operate using Wi-Fi for its satellite-to-air service. For instance, this Reuters story incorrectly states, The U.S. Federal Aviation Administration (FAA) forbids the cabin use of devices that intentionally emit radio waves during flight -- like wireless phones and computers that can communicate with each other.

The trade press tended to handle this better. For instance, Stephen Lawson from IDG News Service, a man who has filed hundreds of stories that I've read, got his facts dead right. Mike Masnick also figured out what was decided, but even he errs in reading the order to indicate only data services are at stake. The two licenses the FCC will grant at auction cover voice, data, broadband Internet, etc., although not ancillary services which isn't defined, but which means using the frequencies for purposes other than air-to-ground, like filling in empty spaces in ground cellular coverage.

I spoke briefly to Connexion by Boeing's Sherry Nebel today to help clarify what was decided. Stating Connexion's general position, she said, "The FCC did a really thorough job of listening to all of the interested parties and addressing a complex situation. We are pleased that the license will be limited to the intended air-to-ground use and ancillary use will not be allowed. And we now look forward to reviewing the commission's ruling in detail." There's that ancillary use again--we'll certainly hear more about it in the future. Nebel confirmed that Connexion will evaluate all of its options, now that air-to-ground is on the table.

Reports have indicated that Connexion pays hundreds of millions of dollars a year in fees to lease the network of satellite transponders necessary to provide the extensive coverage needed for over-water routes. Adding air-to-ground communications for domestic flights could dramatically reduce the cost of offering such services.

Another point of confusion in the order is that it reduces Verizon AirFone's 4 MHz down to 1 MHz, which the commission felt was adequate for continuing to offer their service. They're not worried about overlapping that 1 MHz, either, as the service was originally licensed to handle as many as six overlapping users of the band (on different planes, though). Verizon gets grandfathered with a non-renewable five-year license.

Interestingly, Connexion competitor Tenzing--which has become part of a division of Airbus recently--piggybacks its domestic 64 and 128 Kbps data service on top of Verizon AirFone's current signal. Its international, primarily over-water service uses satellites, a new generation of which will goose the speed up to 400 Kbps increments, making 400 Kbps, 800 Kbps, and 1.6 Mbps service possible for their partners with relatively inexpensive and quick upgrades ($100,000 and a couple of hours on planes with existing satellite equipment).

Now the auctions are a little interesting. The FCC decided (with some dissent) that there are three possible configurations of the band, and that the market can decide through bids which are optimal. The band can be divided into two overlapping 3 MHz pieces, which have 2 MHz of overlap; or into 1 MHz and 3 MHz slices, in either orientation (1 then 3 or 3 then 1). The highest combination of gross bids for the two licenses wins.

No one company may purchase both licenses at auction; neither may one company acquire both afterwards. But two commissioners objected that 1 MHz isn't competitive against 3 MHz, and thus only the overlapping 3 MHz plan should have been up for bid. A de facto monopoly will be created, Copps and Adelstein separately argued, because only the 3 MHz license in the 3/1 scenarios will have enough bandwidth to be a real broadband service.

The FCC also said that they would start considering whether to allow cell phone use in planes via picocells.