Having trouble selling a product? Just get the government to give you some cash. It worked for the banks, so why not the in-flight internet market, too? Aircell, the company behind the market leading gogo product is looking to do just that. They’ve applied for $65MM in federal funding to “accelerate adoption [of in-flight Internet] by US airlines and millions of domestic passengers.”
They are applying to receive this money as a Broadband Technology Opportunities Program (BTOP) grant from the National Telecommunications and Information Administration, a part of the Department of Commerce. One view of the BTOP is that it serves this role:
BTOP provides grants to support the deployment of broadband infrastructure in unserved and underserved areas, to enhance broadband capacity at public computer centers, and to encourage sustainable adoption of broadband service.
Sure, the skies above us are arguably underserved, but unless Aircell plans on using this money to make the in-flight internet free for the passengers as part of this cash grab I’m inclined to think that there are probably other areas that are more deserving of the funding. After all, they don’t need it to build infrastructure (that’s pretty much done) or for R&D (that’s done, too). So what do they want the money for? To stave off bankruptcy? To otherwise line their coffers?
Oh, they do play the national security card as part of their application suggesting that the funding will, “improve public safety and consumer access to in-flight Internet service in the largely unserved US airspace via Aircell’s ATG [air-to-ground] commercial broadband network,” and also that, “in-flight Internet service to be more widely available for national security agencies.” Good thing that they’ve got our safety in mind here.
Ugggh…I hate to be such a cynic but the National Security part of this irks me to no end. I’m sure that they could use the money to do good things for broadband in the air and that is probably worthwhile in the end. But when they make such a blatant and ugly request, particularly today, it just rubs me the wrong way. And I doubt this will make it free, but maybe it will let them operate a bit longer until the economies of scale actually kick in and they can bring the price down to a more tolerable level.
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Aircell may not need this stimulus money. The word on the runway is that the the investors are tired of shoveling out money every month for a venture that may never operate in the black. Aircell is laying off forty percent of the workforce next week.