In-Flight Internet Could Renew Debate Over Phones On Planes

The Federal Communications Commission last week began auctioning off radio spectrum that will let airlines offer broadband Internet access during flights. That would be a welcome addition for business travelers, except for one thing: With Internet access comes the possibility of voice over IP.

On-board Internet will stoke the debate over phone calls on planes, which ignited last year around talk of allowing cell phones on flights. Most travelers dread the thought of listening to fellow passengers chattering. Nearly 70% of them want to keep restrictions on cell phone use, a poll released last spring by the National Consumer League and a flight attendants' association found.

Nine companies bid in the FCC auction, which will license the 800-MHz spectrum now owned by Verizon Airfone for the rarely used in-flight telephones. Among the bidders, Verizon Airfone says if it wins a spectrum license, it will offer in-flight Wi-Fi Internet access within about 12 months. AirCell says it has a broadband system that would be ready by next year to let passengers use their Wi-Fi and cellular devices for Internet access.

The bidders declined to provide details of their post-auction plans, such as pricing, speed, and specific offerings, citing FCC rules that they not discuss bids while the auction is open. But one analyst gives Verizon Airfone an edge. It "has the advantage in deep pockets and a ground network based upon its narrowband system," says William Ho of Current Analysis.

The airlines aren't completely sold on the idea, however, and not just because of the concern that VoIP calls will annoy passengers. United Airlines intends to offer Internet access once the auction is over and will allow data applications but not voice applications, citing etiquette concerns. American Airlines hasn't committed to a service provider and doesn't have immediate plans for Wi-Fi. U.S. Airways would like to offer in-flight Internet access but needs to see that it's a moneymaker and that the equipment is reliable, says Joe Beery, the carrier's CIO and a senior VP.

Heavy Lifting

Airlines are concerned about the cost of putting the necessary equipment on airplanes, which likely would include an air-ground system for connecting a base station on the ground to the public telephone system. "It requires a significant amount of effort [from] both the airline and the aircraft manufacturer," Beery says. U.S. Airways also isn't sure how revenue for in-flight broadband services would be split between the providers and the airline, he says. It's unclear even if the services will generate much revenue: In-flight phone service has been around for years, but the high price and marginal quality have meant it's rarely used.

With rising oil prices, airlines also are reluctant to spend on heavy equipment that burns more fuel. United says it can use the equipment already in place for the Verizon Airfone service to transition to Wi-Fi, which would save money.

The auction for in-flight Wi-Fi is one of several the FCC is conducting. In June, the commission plans to auction 90 MHz of spectrum to service providers for third-generation mobile broadband. The spectrum should let providers offer high-speed multimedia data services at speeds of 128 Kbps and up. The FCC also will auction part of the 2.5-GHz spectrum that has been held by schools for educational television. Some schools plan to use it for wireless broadband such as WiMax, but any parts of the spectrum not in use or leased by 2008 are subject to auction.

The FCC knows it must keep pace with the explosive growth of wireless, and it can't let precious wireless spectrum sit idle, wherever it may be--even on the back of an airplane seat.0