Change is in the air

Connexion mulls U.S. air-ground connectivity

BY DEBBY ARKELL

In business, competition drives change. This is especially true for Connexion by Boeing, Boeing's in-flight connectivity business, which is studying opportunities triggered by a recent U.S. Federal Communications Commission decision.

In December 2004, the FCC announced plans to restructure and open access to the 4 megahertz (MHz) of radiofrequency spectrum allocated for air-to-ground communications. As part of this plan, the FCC intends to license via auction portions of the reconfigured air-to-ground spectrum to two service providers—and permit at least one provider to offer broadband service.

A broadband version of air-to-ground service would permit in-flight voice, data and Internet service to commercial and executive airplanes while over the United States. Connexion officials have expressed interest in becoming a license holder.

"Passengers want the same connectivity in the air that they have at home and in the office," said Beverly Wyse, director of Business Development and Strategy for Connexion by Boeing. "Carriers want—and need—to be as efficient and cost effective as possible, both at the gate and in flight. Broadband data transmission—internationally and domestically—is of value to both."

Connexion by Boeing representatives said the business unit is uniquely positioned to provide this service. It provided the world's first in-flight high-speed information service for commercial airlines, using satellites to provide its services over a very-high-frequency band known as the Ku-band. Satellite service is ideal for international use and on larger jets flying long-haul routes, as the data can be transmitted over water and remote terrain. (The bandwidth allocated by the FCC for air-to-ground communication over the United States, however, is in a different frequency range than the band used by Boeing to transmit to satellites.)

Connexion representatives said air-to-ground service in the United States would complement its international business.

For aircraft flying over the United States, broadband data transmission could emanate from a low-cost network of towers or ground stations.

In announcing the restructuring of the air-to-ground spectrum, the FCC said it recognized that the current air-ground spectrum allocation is inefficient and outdated. It also said competition in the marketplace is crucial to ensuring consumers the best service at the best price.

The FCC will license portions of the reconfigured air-to-ground spectrum to two service providers based on the results of an auction. Its plan ensures no single provider may acquire the entire available spectrum—and potentially opens the air-to-ground, or terrestrial, broadband market to multiple competitors.

"We need to do more to provide more choices and multiple platforms for communications between the air and ground to satisfy the demand for better, high-speed services," said former FCC Chairman Michael Powell in a statement on the December announcement.

The FCC previously had granted licenses to six providers to operate within that 4 MHz band; Boeing is not one of them. Because of how the licenses were allocated, no one service provider can use its bandwidth to provide broadband service. In fact, of the six providers, only one company, Verizon Airfone, is currently using that space.

The outcome of the auction, expected to occur in early 2006, depends on which businesses participate in the auction and how they approach it. Until the auction takes place, the concept of "competition" in the broadband mobile information service market has yet to take shape. However, Connexion officials noted that Boeing understands the technology and is developing the systems necessary to participate in the air-to-ground field.

"Boeing is focused on total customer solutions and providing value," Wyse said. "We are excited to continue to bring services to the airlines and also to the passengers that allow them to do what they want to do, when they want to do it."

debra.j.arkell@boeing.com