Boeing

ICO wins judgment against Boeing

Lynnette Luna — Sun, 02 Nov 2008 23:44:11 -0500

A jury found Boeing should pay $236 million in punitive damages to satellite company ICO Global Communications for breach of contract relating to the build and launch of satellites for the firm, which is headed by cellular mogul Craig McCaw.

Boeing now owes some $607 million to ICO, including $371 million in compensatory damages the same jury awarded last week. In all, Boeing could end up having to pay $700 million. In April, ICO launched a satellite that will deliver mobile entertainment applications. ICO filed its lawsuit against Boeing back in 2004, accusing the aerospace company of hurting the launch of its satellite network by fraudulently raising prices for the project.

ICO originally had a deal with Hughes Electronics in the mid-1990s to build and launch a dozen satellites. When Boeing bought Hughes in 2000, it inherited the contract but only finished two satellites. ICO sued four years later after Boeing allegedly demanded ICO pay another $400 million to finish the work.

For more:
- read Cellular-News

Related articles:
ICO Global launches mobile satellite services
ICO plans mobile video trial for mid-2008
Clearwire, ICO collaborate on mobile video

Aircell to offer in-flight broadband access

Mon, 20 Nov 2006 19:01:33 -0500

We wrote a few weeks ago about how Aircell was picking up where Boeing left off: Offering WiFi services on commercial airliners. Richard Martin offers many more details about Aircell's business model and immediate plans, and you should read his discussion.

Three months ago, Boeing announced that it was giving up on its Connexion from Boeing after investing six years and more than $1 billion in the project. Aircell believes it has a better business model than Boeing, and also argues that its system will be more attractive to carriers and more appealing to passengers. Putting its money where its mouth is, Aircell outbid major carriers in last summer's FCC auction with a $31.7 million offer for 3 MHz air-to-ground bandwidth. Connexions relied on a satellite-based link, but Aircell uses a ground-to-air system consisting of three networks: A ground-based cellular network; a ground-to-air link using EV-DO Rev A technology running over the 3 MHz spectrum that AirCell owns; and a standard WiFi hot zone inside the plane.

AirCell's system offers several advantages over the one Boeing promoted: It weighs much less than the one offered by Boeing--an important consideration for airlines which must cope with higher fuel costs; it costs much less; and it can be installed overnight, which is another attractive feature as airlines do not have to be grounded--and lose business--in order to be retrofitted with the system.

For more on Aicell plans
- see Richard martin's Unstrung discussion
- and Aircell's Web site

Connexion by Boeing, RIP

Mon, 21 Aug 2006 20:01:35 -0400

How the mighty have fallen. Last week Boeing announced it was shutting down its Connexion by Boeing broadband-in-the-air program and was exiting the high-speed broadband communications connectivity market. Boeing said it would work with its customers to facilitate an orderly phase out of the Connexion by Boeing service. Those who used the service liked it. Trouble is, there weren't enough of them.

Boeing said it would take a $320 million charge, writing down the assets and paying termination fees to the customers. All Nippon Airlines, Japan Airlines, SAS, Singapore Airlines, and Lufthansa are among the airlines featuring the service. What should worry analysts who thought broadband in the sky was a good idea is not the fact that Boeing had been shopping the service for a while, but rather, that there were no takers.

Jim McNerney, Boeing's chairman, president, and CEO, said, "Over the last six years, we have invested substantial time, resources and technology in Connexion by Boeing. Regrettably, the market for this service has not materialized as had been expected. We believe this decision best balances the long-term interests of all parties with a stake in Connexion by Boeing".

For more on Boeing's decision:
-see this Boeing press release
-as well as Om Malik's comments

Boeing to sit out FCC airwave auction

Tue, 04 Apr 2006 20:01:39 -0400

In Oscar Wilde's The Ideal Husband, Lord Goring says that "it is always nice to be expected, and not to arrive." He might have been referring to Boeing. The premier plane manufacturer surprised everyone by saying it would not be among the 12 potential bidders in a federal auction of airwaves which will allow wireless broadband Internet access on planes flying over North America. The FCC last Friday unveiled the names of the applicants, which include JetBlue Airways and Verizon Airfone, a unit of Verizon Communications. Boeing has decided that, for now at least, it will stick with a competing satellite-based technology which it has spent hundreds of millions of dollars to develop and market. Boeing, through its subsidiary Connexion, is the only company currently offering WiFi service to airline passengers. Twelve airlines, all international carriers, offer Connexion or plan to do so, but otherwise the service has been painfully slow to take off. The main reason is cost: On-the-verge-of-bankruptcy, U.S. airlines cannot afford Boeing's system, which costs about $500,000 to install per plane.

Analysts say, however, that the market for on-board WiFi service appears to be opening up as the financial condition of airlines starts to improve and customers demand better service and more perks. Analysts say the FCC auction may drive a widespread implementation of WiFi in the skies, and a second broadband system could pose a competitive threat to Connexion sales. The earliest a second broadband system would be available to airlines is mid-2007. Verizon and other bidders say the air-to-ground links they contemplate would be cheaper to install and less expensive to consumers relative to Boeing's system. Verizon has indicated it would charge $15 or less per flight. Boeing offers four levels of Internet service, ranging from $9.95 for one hour to $26.95 for 24 hours. Passengers also can watch four TV channels: BBC World, EuroNews, MSNBC and CNBC.

Boeing's decision not to take part in the bid is partially based on the advantages its satellite-based technology enjoys over the air-to-ground technology its competitors will be using: Satellite communication is available everywhere, while the air-to-ground system is limited to domestic flights because it does not work over oceans. Analysts doubt, though, that Boeing will be watching with equanimity as competitors carve up the domestic market. Henry Harteveldt, vice president of travel research at Forrester Research, said, "I wouldn't rule out Boeing becoming partners with one of the winning bidders and getting in through the back door."

For more on Boeing's WiFi strategy:
- see Ameet Sachdev's Chicago Tribune report

Trend: In-flight WiFi slow to take off

Tue, 04 Oct 2005 20:01:37 -0400

In-flight WiFi is not exactly a major trend yet. In fact, you have to look hard to find it, with fewer than 1 percent of commercial aircraft offering the service to their passengers. One reason is that most passengers are deterred by the $9.95 per hour price of the Connexion by Boeing plan, a plan aggressively promoted by Boeing. The reason for the high per-hour price is that it costs the airlines a lot of money to offer the service. It takes about $500,000 to $600,000 to equip one plane with wireless technology, and the airline loses substantial revenue during the two-week installation period when the plane is grounded. What is more, since the equipment is rather heavy the aircraft consumes more fuel, which is a problem during a time of high fuel prices. Terry Wiseman, an expert on in-flight technology, told The New York Times that at the current projected rate of use--one-in-five passengers--it will be impossible for airlines to squeeze a profit out of on-board WiFi anytime soon.

For more on on-board WiFi:
- see Christopher Elliott's New York Times report
- and Glenn Fleishman's analysis

Connexion, OnAir to offer in-flight cellular service

Tue, 09 Aug 2005 20:01:35 -0400

Boeing's Connexion and Airbus' OnAir are partnering with other companies to offer in-flight GSM and CDMA device usage. Connexion is working with Qualcomm, and the two companies have been testing cabin-fitted GSM and CDMA 2000 base stations with beam calls from the aircraft to the ground via satellite (the test base-stations are provided by UTStarcom). OnAir is working with software company TriaGnoSys and server maker Miltope to build a similar system, if currently only for GSM. OnAir will use compact base stations from Siemens.

Connexion and OnAir have accelerated their efforts to offer in-flight cell phone service in anticipation that regulators in the US and Europe will soon lift the ban on such calls. We should note that while communication regulators such as the FCC may lift the ban, transportation regulators such as the FAA may well not do so. OnAir's system would support up to 200 users simultaneously making phone calls, sending text messages, or surfing the web. Miltope's server ties in the Siemens GSM base station with the WLAN AP.

For more on the soon-to-come on-air cellular service:
- see the websites of OnAir | Connexion
- and Tony Smith's TheRegister report