Auction started for in-flight Internet access
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The FCC begins to auction off frequencies for in-flight Internet service on US domestic airline company.
The situation is tough. Two licenses for nine pretenders, including Verizon Airfone, AirCell, Arcadia Broadband, L.P, and LiveTV, the parent company of low-cost carrier JetBlue.
Winning the auction won’t mean grabbing some contracts with airline companies. But winners will be officially granted to charm American carriers to install their equipment.
But don’t expect to see cheap IP phone service on board. At least three obstacles could explain this:
- There only are 2 licenses, which lead to an oligopolistic situation.
- Up to now, in-flight broadband Internet access mainly attracts business users. Those are probably less reluctant to pay $10 to $30 for one hour of connection.
- The equipment is heavy. They make airplanes suck down more kerosene, and you know how high are oil prices nowadays.
Jessica Zufolo, senior policy director for Medley Global Advisers, an investment consultancy, told the NY Times she expected to see the bid below $10 billion.
The closing date is in 8 days. We will announce the winners here, on 21talks. How much you think they would spend on this?
May 11, 2006 | By Nuno
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