Finally, airborne Wi-Fi is getting some legs with Southwest announcement: In the wake of a series of announcements and leaks last year, and today's formal plan by American Airlines to put AirCell service in all 15 of its domestic 767-200s, we're starting to see traction. Southwest will work with Row 44 to test in-flight broadband by this summer. Row 44 uses Ku-band satellites, the same as doomed Connexion by Boeing, but the company (and other similar operators not yet launched) argue that with modern antennas, more strategic transponder rental, and better signal processing, they can achieve far faster results than Boeing at a far lower cost.
With Row 44 and AirCell set for near-term tests, JetBlue in an active trial, and OnAir finally launched in Europe with a single Air France aircraft (but loads of RyanAir planes to come), there's at last some momentum. What could scotch the momentum is if service turns out to be erratic, if passengers don't like the offering, or costs turn out higher to equip planes.
None of those issues seems likely to come into play. The satellite operators are using well-known technology, and AirCell has been operating ground-station based telecom for general (private) aviation for many years. The cost for equipping planes is also well understood at this point.
Passengers didn't flock to Connexion, and some argue that was because of its high cost (over $25 for the longest flights), but I think it was more likely that Boeing was on the rising curve of people carrying laptops with decent battery life with Wi-Fi chips that didn't suck power too rapidly (the Intel Core processors hadn't hit when Connexion was in its heydey), and there were enormously fewer handhelds with Wi-Fi. The iPhone, with 4m sold to date, changes the equation of what people will want to do in the air.
Now, interestingly, there's room for a great partnership between Apple and all these various airline services. Why? Because Apple is now renting movies, which require an Internet connection to start watching after download. A colleague found that on his trip back from Macworld Expo, he couldn't watch the movies he'd downloaded before taking off because he didn't have a live connection in the air for the several thousand bytes needed to perform activation. Apple could partner with airlines and services to allow customers to activate rental movies in the air without paying for a connection. This would work even with JetBlue's limited bandwidth.
Apple could also put cached movies in on-board servers--say the most popular 300 films--so that people could download the movies over the local network at 802.11g or 802.11n speeds (a few minutes) when boarding or in transit. That's a longer-term project, but it's something I've heard discussed for years now: media servers for cafes, hotels, trains, planes, and other venues.