If approved, planes could become Wi-Fi hot spots as early as next year

Author: Paul Davidson
Source: USA Today

Think you can escape the office and the Internet at 35,000 feet?

Not so fast.

AirCell and a unit of JetBlue said Monday that they plan to turn airplanes into Wi-Fi hot spots as early as next year.

If regulators approve, the services would let fliers use laptops to e-mail, tap corporate networks, surf the Web, play games and possibly even watch movies on domestic flights, all for about $10 a trip. They also might make cellphone calls, though that faces tougher regulatory hurdles and consumer resistance to chattering neighbors.

AirCell was the high bidder in a Federal Communications Commission auction of air-to-ground airwaves that ended last week, agreeing to pay $31.3 million for 3 megahertz of spectrum.

"You want to make it possible for people to do what they do in the office, in the hotel, at Starbucks and in the airport lounge," says Jack Blumenstein, CEO of AirCell, which provides wireless services for corporate jets via satellite. Service, he says, could roll out next summer.

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AirCell, based in Louisville, Colo., won the spectrum as part of a joint venture with private equity firm Ripplewood Holdings.

JetBlue's LiveTV entertainment unit bid $7 million to snag a smaller 1 megahertz slice of airwaves. It may offer e-mail and Web surfing to customers of its existing satellite TV service on JetBlue and Frontier Airlines aircraft, says Jeffrey Frisco, vice president of LiveTV.

Passengers' Wi-Fi-enabled laptops, BlackBerrys or other devices would link with a small airplane antenna that sends the broadband traffic to towers on the ground.

The Federal Aviation Administration first must approve the Wi-Fi services to ensure they don't disrupt airplane navigation equipment. But the companies are optimistic. Verizon Airfone and United Airlines last year won FAA approval to install Wi-Fi networks on Boeing 757-200 series aircraft.

Blumenstein would not discuss pricing but has said passengers would pay about $10 a flight. Alternatively, he says, subscribers of T-Mobile's Wi-Fi service, for example, might pay an extra monthly fee for in-flight broadband.

Ultimately, he says, passengers could use cellphones on board, paying AirCell a roaming fee. The FAA and the FCC are considering whether to approve in-flight cellphone usage. In a USA TODAY survey last year, 68% of respondents favored keeping the in-flight cellphone ban.

LiveTV would not offer cellphone service, Frisco says.

If Wi-Fi services are approved, passengers might be able to use new wireless phones that have voice-over-Internet technology.

Blumenstein says AirCell will soon launch discussions with all major U.S. airlines, which would share in the revenue. But it's unclear whether struggling U.S. airlines are game.

Verizon Airfone has scaled back its little-used seatback phone service, which costs $3.99, plus $4.99 a minute for domestic calls. Airfone has two years to find a smaller slice of airwaves if it plans to continue service. Airfone, which withdrew from the auction after a $12.4 million bid, did not return a phone call seeking comment.

Other text-messaging and e-mail services on some domestic flights largely have been dropped. Connexion by Boeing has deals with 10 airlines for satellite-based broadband on overseas flights, at $10 to $27 a trip. U.S. airlines ditched plans for that service after 9/11. But with lower prices and equipment costs of $80,000 a plane — vs. $500,000 for the Boeing service — the airlines should be receptive to the new service, analysts say.

"It's a differentiator," says Forrester Research analyst Brownlee Thomas. A Forrester survey found 38% of business fliers and 22% of leisure travelers would pay up to $30 for in-flight broadband.

"The leisure traveler wants to be entertained, and the business traveler wants to be productive," says American Airlines' Tim Wagner.