Business travelers could find in-flight Internet waning

Published reports Thursday indicate Boeing may soon dump its in-flight Internet venture Connexion because the service hasn't generated a profit in six years.

Citing people familiar with the situation, The Wall Street Journal reported Thursday that Boeing has inquired with a number of commercial-satellite operators and other potential suitors who might be interested in buying the business or becoming a major partner.

If Boeing can't find a suitable buyer or partner, the services could end. Connexion enables passengers to have high-speed Internet hookups, via satellite, in-flight at a cost of US$10 to US$27.

In the WSJ story, Boeing said it was evaluating the long-term business model for Connexion to assess what's best for both the business and its customers. "The system's performing well, we know we have a useful product, but we're trying to determine how good a business we have."

Published reports say the business, or lack thereof, is largely due to disinterest from U.S. airlines in outfitting their fleets with the system. International carriers including Lufthansa, Japan Airlines and Singapore Airlines offer the service.

The Boeing news comes on the heels of news earlier this month that Verizon Airfone dropped out of the bidding for wireless airwaves that would have enabled it to provide wireless broadband service on airplanes. Airfone uses narrowband phones in seatbacks. The voice-only service also has not been widely used.

The Federal Communications Commission (FCC) recently sold licenses for 4 MHz of the 800-MHz spectrum that Verizon now uses for its Airfone. The 4 MHz of spectrum is intended as an air-to-ground "backhaul" for wireless services accessed by multiple devices on a plane. Those services could include broadband Internet access and other data services as well as voice, the agency said last year.

From that bidding however may arise a new service powerhouse: JetBlue.

LiveTV, a wholly owned subsidiary of JetBlue, made the winning US$7 million bid for 1 MHz of the spectrum. LiveTV provides live satellite TV and XM Satellite Radio channels on about 300 aircraft used by JetBlue and other airlines. The company bid for the spectrum with an eye to offering unspecified future services.

Of course all of this wrangling may in some cases be moot should the FCC allow flyers to use cell phones. There are indications the rules banning such call could be relaxed by early 2007.

The IDG News Service contributed to this report.

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