U.S. to auction frequencies for in-flight Net use By Ken Belson The New York Times Published: May 9, 2006, 10:45 PM PDT
http://news.com.com/U.S.+to+auction+frequencies+for+in-flight+Net+use/2100-1030_3-6070567.html?tag=nefd.top Many fliers look forward to boarding planes so they can get away from their phones and e-mail. That sanctuary will inch one step closer to oblivion today when the Federal Communications Commission begins to auction off frequencies for in-flight Internet service. Nine companies, including Verizon Airfone, which pioneered pay phones in the air, are expected to enter bids for the two licenses available. The companies have developed a variety of technologies that effectively create wireless networks on planes so fliers can use their laptops to surf the Web or to make calls with voice-over-Internet technology. The auction will not advance the on-board use of conventional cell phones, which use other frequencies and are still prohibited in the air. The winners of the auction, which could take several days to complete, would still have to persuade financially pressed American carriers to install their equipment. They would also have to figure out whether and how to divide the revenue that the technology may generate. Foreign carriers, including Lufthansa and SAS in Europe and Japan Airlines and Singapore Airlines in Asia, already offer an in-flight, high-speed Internet service called Connexion, developed by Boeing for its jets. The service typically costs $10 to $27 a flight per passenger. But a mixture of rules, costs and caution has prevented American carriers from expanding Internet use in their cabins. Under financial stress, airlines are reluctant to spend hundreds of thousands of dollars on heavy communications equipment that could reduce fuel efficiency at a time when fuel prices are rising. Some services, including Connexion, beam voice calls and data from planes to satellites, which then send the signals to antennas and networks on the ground. The FCC's licenses, however, would allow signals to be sent from planes directly to the ground. This part of the spectrum has been reserved for pay phones now on planes. But since it is little used, the FCC decided to re-allocate those frequencies. While it is difficult to gauge how high the bidding might go, Jessica Zufolo, senior policy director for Medley Global Advisers, an investment consultancy, said: "It's not going to be as heavy and lucrative as the cellular auctions that bring in north of $10 billion. This auction will be well below that not because the spectrum is any less valuable, but because the scale is much smaller." As in-flight Internet services are developed, airlines must weigh any extra revenue against potentially alienating their customers. While some business travelers applaud efforts to let them stay connected at high altitude, many other fliers--and the flight attendants who would have to police them--oppose turning cabins into Internet cafes. "Airlines will have to be careful how they roll it out," said Jonathan Schildkraut, a telecommunications analyst at Jefferies & Co. While "spending $10 for a broadband connection is a no-brainer" for business travelers, he said, "I don't trust people to observe the laws of propriety" if they are allowed to make a phone call on a plane, even on a headset connected to a laptop. Some restrictions on the use of wireless devices on planes have already been scaled back. United Airlines and Verizon Airfone (originally GTE Airfone), which has offered on-board phone service since 1987, won approval from the Federal Aviation Administration last year to install Wi-Fi networks on planes that fly domestically. That would enable laptop users with Wi-Fi equipment to go online as they can at many hotels and coffee shops. The companies say they hope to sell high-speed data services next year if Verizon Airfone is a winner in the spectrum auction. The equipment they plan to install to relay signals to the ground is lighter than satellite-based systems, and the Wi-Fi network can use components already installed for seat-back phones. Other bidders today include AirCell, which makes communications systems primarily for private jets, and LiveTV, a subsidiary of JetBlue that provides in-flight television and radio services for the airline. These companies are expected to aim at business travelers who carry laptops and can bill their employers for their Internet connections. "As a frequent traveler, I can tell you how important it is to have a quiet in-flight environment," David Neeleman, the chief executive of JetBlue Airways, said by e-mail. "It's also important to use technology to stay in touch with family, friends and the office. I support silent options similar to text messaging." The airlines still have several hurdles to clear. The FAA is expected to consider a report in December from the RTCA, a not-for-profit advisory group that is studying the use of electronic devices with transmitters on airplanes. An interim report by the RTCA in March did not indicate any fundamental problems with offering Internet service, analysts say. But another study, financed by Carnegie Mellon University and the FAA, found the use of electronic devices could interfere with devices that pilots use for satellite-based navigation. The report, published in March, also found that passengers were frequently violating the ban on the use of cell phones and BlackBerries. "There's enough there to suggest that there could be potential problems," said M. Granger Morgan, the head of the department of engineering and public policy at Carnegie Mellon and a co-author of the study. "We are not saying don't do this. We're saying let's go slow and find out what the environment in the cabin is. If you start relaxing things, you will get even more frequent violations." Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list medianews@twiar.org To unsubscribe send an email to: [EMAIL PROTECTED]
