Posted on: Tuesday, October 19, 2004
FCC faces dilemma on Wi-Fi in the sky
By Paul Davidson
USA Today
The good news is that U.S. domestic flights could soon become Wi-Fi hot spots, letting passengers surf the Web at 35,000 feet as easily as they can at Starbucks.
The bad news is that federal regulators have been boxed into a no-win situation: promote low prices and great features, or ensure that the service works reliably. Unfortunately, some industry officials say, it may be impossible to do both.
The Federal Communications Commission is set next month to decide how to auction spectrum to wireless carriers to bring high-speed Internet service to U.S. airlines as early as next year. Proponents say the new "air-to-ground" service would be more economical for struggling U.S. airlines than current satellite-based in-flight broadband offered only overseas.
The agency could auction the airwaves to at least two companies, encouraging competition but risking interference among the services that, some say, would prevent any from working properly.
Alternatively, it could auction the spectrum to one company, ensuring that the service works smoothly but creating a virtual monopoly that could mean higher prices, fewer features and more limited rollout.
"It's tough," says Lauren Patrich of the FCC's wireless bureau. "Competition is very important, but quality of service is equally important."
Today, many domestic flights offer instant messaging, text messaging and e-mail for $4 to $10 a flight. The introduction of broadband, though, would let passengers shop online and tap into corporate networks.
The problem is that just a small slice of spectrum is available for communications services on airplanes. Verizon Airfone is the only carrier using it for a seatback phone service that, industry experts say, is sparsely used.
At one time, several carriers had licenses for similar services but pulled out in the face of weak demand, prompting plans by the FCC to re-allocate the spectrum.
Verizon initially said just one company could handle broadband with the limited spectrum and its Airfone subsidiary should be awarded the airwaves free because it's already in the spectrum. Verizon Airfone President Bill Pallone says he now agrees with FCC officials who want to auction a block of spectrum for broadband and a block for voice and possibly e-mail and text-messaging services.
AirCell and Boeing say Verizon is simply trying to protect its monopoly and that the spectrum could easily be shared by two to four carriers. They want to place rivals' ground antenna towers far apart from each other and use "smart" antennas that ignore incompatible signals, among other techniques.
Competition would "drive down prices for the airlines, which translates into lower prices" for passengers, says AirCell Chief Executive Officer Jack Blumenstein. "A bad decision by the FCC will create a monopoly right out of the gate." A monopoly also could result in exclusive deals on certain routes that lock out competing airlines.
Verizon says it could be tough for rivals to coordinate tower placement, especially when they build new towers to accommodate growth. Also, Verizon says, competing wireless signals are more likely to disrupt each other on takeoff and landing when planes and towers are closer together. Interference would cut download speeds and, at worst, knock out service.
"The physics just don't allow it," says Pallone. "We need to operate in the real world." AirCell says the concerns can easily be addressed.
Under either plan, passengers' laptops would not communicate directly with antennas on the ground, at least initially. Rather, they would use Wi-Fi, the popular short-range wireless technology, to talk to an airplane antenna. The antenna would, in turn, beam the data to and from ground networks.
