The recent battles at the Federal Communications Commission between AirCell Inc. and the cellular carriers that oppose its air-to-ground communications system may be starting to affect AirCell’s business.
In a letter sent to Steve Weingarten of the Commercial Wireless Division of the Wireless Telecommunications Bureau, Michele Farquhar, a partner with Hogan & Hartson L.L.P., said AirCell customers have begun to express frustration with AirCell’s lack of sites and coverage.
Although it received permission from the FCC to operate the system just a few months ago, Aircell said its buildout efforts have been hindered by breakdowns in the notification and coordination process and a lack of progress on pending follow-on waiver petitions at the FCC.
Most of AirCell’s customers expected buildout to proceed once the waiver was granted, but buildout delays have caused the company to lose two customers, said Geoffrey Hoppe, vice president of sales and marketing for the company.
AirCell said it needs just 150 sites to provide coverage throughout the nation and so far has about 40 sites operating. The company touts its system, which makes use of cellular spectrum, as not only an affordable communications system for general aviation pilots and passengers, but a life-saving mechanism that would provide current weather information to pilots as well as serve as a back-up communications system in emergencies.
The company already has partnered with several cellular carriers, including United States Cellular Corp. A handful of other carriers hoping to partner with AirCell still are awaiting a waiver from the FCC allowing them to use the system.
However, a number of carriers have opposed the system, including AirTouch Communications Inc., Ameritech Corp., AT&T Wireless Services Inc., Bell Atlantic Mobile, BellSouth Cellular Corp., GTE Wireless Inc. and SBC Wireless Inc. Their arguments originally centered around fear of interference the system might cause in their networks, and have since evolved into disputes about the scope of the waiver and the process for granting it.
The opponents continue to fight the AirCell system at the FCC with new arguments. In a filing earlier this month, opponents said AirCell is performing virtually all significant functions of the airborne system in violation of the order and that some of AirCell’s newer partners are operating the system without first securing a waiver of the airborne cellular rule.
Opponents say AirCell’s partners have turned over responsibilities to AirCell that should be handled by the carrier, such as providing frequency coordination and serving as a constantly available contact capable of shutting down the ground stations. AirCell’s extensive involvement in key aspects of the system means it is “operating a radio-based system without a license in areas its partner licensees cannot even provide service and over frequencies devoted to existing operators,” said the opponents in the filing.
AirCell, however, insists its role is that of a reseller. The company pays carriers for airtime usage and also pays a fee for placing its equipment at their sites. Jim Stinehelfer, president and chief executive officer of AirCell, said the system benefits carriers by not only providing new revenues but also by making use of low-use rural cell sites that might not normally generate revenue.
Stinehelfer said he believes some carriers oppose the system out of fear it may open the floodgates for other innovations that also would make use of cellular spectrum.
In a recent letter to WTB Chief Thomas Sugrue, AirCell expressed its frustrations about what it said is abuse of the FCC’s waiver conditions by opposing parties. The letter said opposing parties are refusing to participate in good faith in the coordination process outlined in the waiver by not providing specific channel information needed to complete frequency coordination and waiting until the last possible day to respond to requests for such information.
In addition, AirCell said the opponents’ numerous filings have caused it delays in securing new partners and resolving outstanding issues in the waiver.
Meanwhile, AirCell said it has secured significant new financing from a major investor.
