Titillating talk with LiveTV

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In recent days a number of readers have asked me why I haven’t blogged about LiveTV’s acquisition of the Verizon Airfone network. Isn’t this a big deal, they ask. Don’t you get the teddy bear warm and fuzzies when you write about this stuff? Well yes and no, and yes, respectively.

 

The transaction, which calls for LiveTV to assume Airfone’s assets, including 100 US air-to-ground (ATG) towers from 1 January, certainly makes life a little easier for LiveTV. The JetBlue Airways subsidiary doesn’t have to wait until 2010 to assume full rights to the 1MHz narrowband slice of spectrum in the 800MHz band allocated to ATG services that it acquired through FCC auction in 2006 (Aircell placed the winning bid for the 3MHz broadband licence).

 

You see, Airfone – whose vision of in-flight broadband grandeur was put to rest by Aircell’s $31.3 million smack-down at auction – was still guaranteed the use of 1MHz for five years under a prior FCC decision, and given a two-year grace period to relocate its business to that portion of the band.

 

“They [Airfone] had to be out of Aircell band by October of this year and our band by 2010,” a LiveTV spokesman told me recently.

 

However, that didn’t stop the two from sides from working together. LiveTV has been using the Airfone network of base stations to support JetBlue’s test of “BetaBlue” light connectivity onboard one of its Airbus A320s.

 

And in a December 2007 letter to Airfone’s Magnastar business aviation customers – which has been sitting on Airfone’s web site for months - then president Bill Pallone said: “There is a possibility that Airfone’s air-to-ground services will continue without interruption beyond 2008. We are currently in discussions with LiveTV, an affiliate of JetBlue, to sell Airfone’s business and operations to LiveTV. If those discussions are successfully concluded, LiveTV would take over the Airfone business effective December 31, 2008, and would continue to provide service to Airfone’s customers under the terms of their existing service agreements. However, if we do not enter into a definitive agreement to sell our business to LiveTV, we will terminate operations effective December 31, 2008.”

 

Needless to say, Magnastar customers are pleased that the arrangement has been finalized. So too are Frontier Airlines and Continental Airlines, which have joined JetBlue in planning to offer LiveTV’s connectivity service for free to passengers.

 

Free is key, according to LiveTV. The LiveTV spokesman says: “Many, many systems have flown but none are still in operation due to the business case. Unfortunately, pricing for services in-flight are set by what you can get on the ground. With WiFi going free at airports and hotels, there will quickly become a market battle for the frequent flyer. Will he/she use broadband at airports or wait until on the plane?  Not only is this hard to determine now, but we are all making decision for 5-10 years.”

 

He adds: “We see the marketplace right now in the ‘scissor effect’.You either have to be very fast like at home (Ku-band satellite is the only solution long term) or very cheap (Free). Anything in the middle gets chopped up. This divide “chop zone” widens as time goes on. Ground networks get faster and faster while pricing plummets.”

 

Reading between the lines here, I’d say LiveTV doesn’t see Aircell’s offering (which will cost passengers in the $10-$12 range) as a viable strategy since it is neither A) free nor B) Ku-band-based.

 

But what about WestJet, whose narrowbodies are equipped with LiveTV’s live television system? Will the Canadian operator seek to offer the same sort of service as its LiveTV hardware-equipped counterparts in the USA?

 

“On Canada, [it's a] more difficult market to serve [with a] large area but less airplanes and passengers,” says the LiveTV spokesman. ”We are working on a couple of options for this market (WestJet) since we already handle their TV system.” Mexico and Caribbean are similar to Canada, he notes.

 

For its part, Aircell has been rather quiet about its progress in Canada. The company has said it expects to extend coverage to Canada, the Caribbean and Mexico within a year of introducing its ATG broadband service in the continental USA, which is expected to start shortly.

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