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Could AirCell Be In Monopoly Trouble?  
User currently offlineLHCVG From United States of America, joined May 2009, 1556 posts, RR: 1
Posted (4 years 4 months 3 weeks 1 day 11 hours ago) and read 2809 times:

It just occurred to me that I don't think I've heard of any other company with as widespread an internet footprint as they have, so it got me thinking if they might be subject to some antitrust action. I can't believe they are the only folks that have come up with a technical solution that works and is reasonably cheap (compared the disaster of Connexion by Boeing).

8 replies: All unread, jump to last
 
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 1, posted (4 years 4 months 3 weeks 1 day 10 hours ago) and read 2710 times:

Quoting LHCVG (Thread starter):
I can't believe they are the only folks that have come up with a technical solution that works and is reasonably cheap (compared the disaster of Connexion by Boeing).

Aircell doesn't work across the"ponds" (Aircell is ground-based-easier to implement but much more limited)....Boeing's did.

Aircell has competition with Row 44 internet.



"Up the Irons!"
User currently offlinewjcandee From United States of America, joined Jun 2000, 5154 posts, RR: 22
Reply 2, posted (4 years 4 months 3 weeks 1 day 10 hours ago) and read 2697 times:

Being successful isn't illegal. One reason that they're successful is that their solution is cheap-ish and installs overnight.

But, with the market share that they are developing, they have to play by some different rules. For example, I would think that they can't call up Row44 and discuss having both agree to a higher price per use.

As to why they are the "only folks" that came up with a certain solution is that they were the "only folks" (e.g. highest bidder) who bought the piece of spectrum that is used for this service. IIRC, it's the piece of spectrum that used to be used for the Goeken/Western Union air-to-ground phone system.

[Edited 2010-04-09 09:35:19]

User currently offlineLHCVG From United States of America, joined May 2009, 1556 posts, RR: 1
Reply 3, posted (4 years 4 months 3 weeks 1 day 10 hours ago) and read 2631 times:

Quoting wjcandee (Reply 2):
Being successful isn't illegal. One reason that they're successful is that their solution is cheap-ish and installs overnight.

But, with the market share that they are developing, they have to play by some different rules. For example, I would think that they can't call up Row44 and discuss having both agree to a higher price per use.

As to why they are the "only folks" that came up with a certain solution is that they were the "only folks" (e.g. highest bidder) who bought the piece of spectrum that is used for this service. IIRC, it's the piece of spectrum that used to be used for the Goeken/Western Union air-to-ground phone system.

That could be it. Certainly if they are indeed the only ones with that spectrum (since I don't know what Row 44 uses) that would be fair. I was merely curious since they are the only name I think of here, and if this would be a situation where a regulation authority steps in an says they need to divest some spectrum to allow more competitors or something.


User currently offlineLAXintl From United States of America, joined May 2000, 25145 posts, RR: 46
Reply 4, posted (4 years 4 months 3 weeks 1 day 9 hours ago) and read 2612 times:

Quoting LHCVG (Reply 3):
a regulation authority steps in an says they need to divest some spectrum to allow more competitors or something.

 
You clearly don't know the history of broadband and what FCC has done.

The FCC had an industry wide auction of radio spectrum for the service and ultimately exclusive licensing for ground based system which Aircell won.
http://www.aircell.com/index.php?Ite...d=159&option=com_content&task=view



From the desert to the sea, to all of Southern California
User currently offlineLHCVG From United States of America, joined May 2009, 1556 posts, RR: 1
Reply 5, posted (4 years 4 months 3 weeks 1 day 9 hours ago) and read 2569 times:

Quoting LAXintl (Reply 4):

You clearly don't know the history of broadband and what FCC has done.

The FCC had an industry wide auction of radio spectrum for the service and ultimately exclusive licensing for ground based system which Aircell won.
http://www.aircell.com/index.php?Ite...=view

I know they get exclusive rights to spectrum they win at auction -- my point was whehther it might come in later that they are found to somehow be anti-competitive if no other companies can make a good entry into the market. I was thinking along the lines of a cell phone merger, where they sometimes have to divest spectrum in markets where they have too much presence (however that's defined). As in, could other companies down the road go to the feds and say that they could offer cheaper/better product, but that they cannot because AirCell has exclusive rights to the spectrum. To be clear, I'm not saying the feds should or will take action, just throwing out the question of whether this could end up a problem in the future.


User currently offlineLAXintl From United States of America, joined May 2000, 25145 posts, RR: 46
Reply 6, posted (4 years 4 months 3 weeks 1 day 8 hours ago) and read 2507 times:

Exclusive rights mean exclusive right.

There is a long precedent where the government has allocated radio spectrum for the sole use of specific private companies via a lottery process. So no, I cant see how this would be challenged without the government itself being liable for huge damages for backing out of such agreements.

If someone else comes up with a better mouse trap good for them, but the allocated radio spectrum and license for ground to air commercial broadband in the US rest exclusively with Aircell, similarly how in the past the air to ground telephone network was with GTE(and eventually Verizon) till the business model collapsed.
Also for the record JetBlue/LiveTV also won a narrow(1Mhz) portion of spectrum in the same auction and is allowed to offer a non-public ground to air broadband communications network for airlines (eg to cockpit crews) if they wish to develop such in the future.



From the desert to the sea, to all of Southern California
User currently offlinerfields5421 From United States of America, joined Jul 2007, 7607 posts, RR: 32
Reply 7, posted (4 years 4 months 3 weeks 13 hours ago) and read 2264 times:

Quoting LHCVG (Reply 5):
my point was whehther it might come in later that they are found to somehow be anti-competitive if no other companies can make a good entry into the market. I was thinking along the lines of a cell phone merger, where they sometimes have to divest spectrum in markets where they have too much presence (however that's defined).

Those are different situations.

In the cell phone situation, no company was granted exclusive rights to a certain part of the spectrum. Any requirements to divest part of the spectrum in certain markets is because the company obtained that 'too much presence' by mergers and purchases. Those mergers and purchases occur after the market was established. They gained 'too much presence' by trying to capture ownership of all the possible assets in the market.

The AirCell situation is not a 'competitive' portion of the spectrum. What they bought was one block, exclusively limited to them.

One reason the original grant back to GTE was exclusive was so that a company would have the ability and incentive to develop the technology. Aircell is now in that situation.

While right now it looks like they have a monoply, they do not have exclusive rights to all ground/aircraft/ground communications. They can have competitors if anyone wishes to develop the technology for an alternative methodology.

Which someone certainly will if it is profitable to do so.

Though I suspect the main reason you are not see competition right now is that companies are waiting to see how successful and how lucrative the Aircell business model becomes.

If there is a lot of money to be made in that business, others will enter as competitors with other technology.

At this point it still appears that Aircell is not making a profit, or at least enough of a profit to allow them to afford the equipment and support they need to expand/ grow their business.

They had to go to investors and secured $176 million in additional funding back in January 2010

Quote:
Proceeds of the financing will be utilized to provide funding for capital investments for network expansion and operating needs during this rapid growth phase of the business.

Also, while Aircell has a rather exclusive market with the US, do you think passengers and airlines are going to be happy with a US only solution?


User currently offlinewjcandee From United States of America, joined Jun 2000, 5154 posts, RR: 22
Reply 8, posted (4 years 4 months 3 weeks 9 hours ago) and read 2105 times:

Quoting rfields5421 (Reply 7):
the original grant back to GTE

Goeken


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