A company affiliated with Louisville-based AirCell has officially won airwaves to provide airline passengers with high-speed Internet access during flights.
AC BidCo LLC, which is linked to AirCell, won a three-MHz license with a bid of $31.3 million in a Federal Communications Commission auction that concluded Friday after more than three weeks of bidding.
AirCell has said its broadband system would be targeted for commercial deployment in 2007. AirCell did not respond to a request for comments Friday.
The broadband system would allow passengers to use their Wi-fi devices to access the Internet in the airplane cabin.
AirCell tested its “air-to-ground” system in 2005. Passengers used e-mail and surfed the Internet over the Wi-fi connection, and one passenger called the speed “DSL-like,” according to AirCell last year.
AirCell also said then that the system would enable U.S. airlines to provide broadband at prices “very similar to what they pay on the ground.”
Denver-based Frontier Airlines spokesman Joe Hodas said the carrier, which has worked with AirCell on in-flight tests in the past, heard from its customers in a survey that Wi-fi would be a benefit they would be willing to pay for, in the $10 range.
AirCell’s main business is providing communications equipment for private jets, but the spectrum allows AirCell to expand its business to broadband wireless Internet systems for airlines.
The company may face a challenge in getting airlines in the financially-troubled industry to invest in the technology for a perk like in-flight Internet service. AirCell said in 2004 it could equip a plane for about $100,000.
Airlines have to balance the cost of equipment, installation and extra weight against what they can charge and whether passengers will use the service, according to Forrester Research travel analyst Henry Harteveldt.
“However, all it will take is one competitor getting into this, and most of the rest will follow. An airline that doesn’t offer this will lose passengers to one that does,” according to Harteveldt.
The auction also does not affect the Federal Aviation Administration’s restrictions on the use of personal electronic devices on aircraft, including wireless phones, personal digital assistants and computers.
About 38 percent of frequent business travelers said they are interested in Internet access on long flights, even for a fee, according to Forrester Research.
“Our focus would be Internet,” Hodas said. “There’s not much of a chance that we’re going to allow cell phones on the plane…. Our intuition tells us that having mass cell phone use on an aircraft leads to a poor customer experience.”
United Airlines spokeswoman Robin Urbanski said the airline still plans to offer Wi-fi service, and already has begun installing equipment.
Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or at kyamanouchi@denverpost.com.
