The winner bidder for the larger chunk of air-to-ground spectrum expects commercial service in 18 months plus Canadian, Mexican rollout: Jack Blumenstein, AirCell CEO and president, said in an interview today that he is confident all the pieces are in place for the veteran general aviation broadband and radiotelephony provider to offer in-flight Internet access on at least one commercial airline by the end of 2007. The service will be distributed on board via Wi-Fi.
Blumenstein also said that Canada, Mexico, and the Caribbean nations are likely to follow the U.S.'s lead on use of this spectrum as the countries previously did for the original organization of spectrum for radiotelephony in the early 1990s. "These countries once again are going to follow the same process on a fairly expedited basis," he said. This could give AirCell a footprint covering what Blumenstein described as 60 percent of global passenger air miles.
AirCell won an exclusive 10-year license of 3 MHz in the 800 MHz band last week, paying over $31m for the privilege; the license was technically won by a sister company, AC BidCo, which AirCell is affiliated with as a result of an in-progress reorganization that includes investment from private equity manager Ripplewood Holdings. LiveTV, a subsidiary of airline JetBlue, won the less important but still significant exclusive 1 MHz, nonoverlapping license for just over $7m.
AirCell's Blumenstein and soon-to-be chairman Ron LeMay--former president and CEO of Sprint and CEO of Sprint PCS--spoke under the condition that they not answer questions about bidding and certain details related to the auction process per FCC rules while the auction is finalized in a few weeks.
A representative from LiveTV said that the company would defer any comment until the auction was finalized. AirCell has made many previous public comments, while LiveTV's plans for the spectrum are unknown. Update: In a USA Today story, LiveTV's head is paraphrased saying that, "It may offer e-mail and Web surfing to customers of its existing satellite TV service on JetBlue and Frontier Airlines aircraft."
While Verizon AirFone is obliged to overhaul its in-flight telephone service, migrating from parts of 4 MHz down to 1 MHz of spectrum over the next two years, Blumenstein said that AirCell's schedule wouldn't be beholden to Verizon's timetable. He declined to comment on how their system and Verizon's would interact during the transition, but stated it wouldn't be a technical problem.
AirCell has had ongoing conversations with air carriers, and one of their board members and senior adviser is former American Airlines head Robert Crandall. "Bob has been very instrumental in helping us understand and have the right discussions in the airline community," said Blumenstein. "We've had conversations in some cases over a couple of years, first to understand the airline perspective--to understand where they would like to see this go from a service and price standpoint." Blumenstein said it was premature to talk exact pricing. Connexion by Boeing, the only commercial aviation in-flight broadband operator, charges from about $10 to $25 based on flight duration for unlimited use of their satellite-based network.
The equipment they plan to deploy is significantly lighter and cheaper than "that which has been used historically in international flights involving satellite communications," he said. AirCell will use EVDO Rev. A for backhaul to relay data to and from the ground at speeds that Blumenstein said exceed 3 Mbps (1.5 Mpbs in each direction) in testing last fall. Beyond normal FAA certification, Blumenstein said they expect no other regulatory hurdles to in-flight broadband over Wi-Fi.
Blumenstein said that there are a host of airline-specific applications which would be available beyond any passenger use, including telemetry, monitoring, and security. Although Blumenstein didn't mention telemedicine--equipment that allows a remote medical professional to see the condition of a crewmember or passenger--it's of key interest to airlines, which can spend thousands of dollars or more diverting a flight unnecessarily for medical purposes.
Voice over IP (VoIP) isn't a per se priority for AirCell, which will be directed by its airline customers for specific deployments. AirCell chairman LeMay said that the equipment they design will be able to offer quality of service prioritization for voice if "that's the airline's desire." He said AirCell conceives of this as a data service will voice coming second.
While the FAA and FCC haven't approved in-flight cellular phone or device use, Blumenstein said that the process for evaluating the safety of such equipment is well underway in the U.S. AirCell won't try to accelerate that process, but they will be prepared for a time in which cell use might be approved. LeMay said that the cellular data side of the market could be of great interest, with passengers roaming their handheld devices and phones right onto the plane's network. "We could reach agreements with the cellular guys that would allow them to offer an airline option."
But both LeMay and Blumenstein say there's no chance of cell calling being forced down airlines' or passengers' throats, echoing assurances from other current and future in-flight broadband operators that there are many social factors involved that still need to be worked out. It might be that some airlines allow voice at certain points in a flight.
Some may worry that the extension of Internet and eventually cell access to domestic flights could erode personal space and time even further. But Blumenstein noted that it's not necessarily access that people are always looking for but rather the knowledge that they have "the ability communicate." He likes to remind people that communications devices have off switches.