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Row 44's in-flight Internet service gets off the ground

The Westlake Village firm, which is outfitting airlines with inexpensive satellite-based devices that allow passengers to stay connected, may succeed where Boeing failed.

November 24, 2009|By W.J. Hennigan

Billions of dollars and scores of top engineers with the world's largest aerospace company couldn't get it to fly.

But now a tiny, 25-employee firm in Westlake Village thinks it has found a way to make in-flight Internet access via satellite finally take off.

Row 44 is outfitting planes with inexpensive devices that allow passengers to access the Internet while flying in a plane. Earlier this year, Southwest Airlines Co. and Alaska Airlines began offering Row 44's Internet service.

It isn't first time that wireless Internet has been offered on an airline. In 2000, Boeing Co. launched an Internet system called Connexion for large airliners. But after Boeing sank more than $1 billion into development, few passengers were willing to pay the $30 connection fee. Several international carriers offered the Connexion service on a handful of long-haul flights, but Boeing pulled the plug on the program in late 2006, saying it wasn't financially viable.

So why does Row 44 believe that it can succeed when an aerospace giant, with significantly deeper pockets, fell short?

For one thing, Row 44 says it hasn't had to build the multibillion-dollar satellite system. It's piggybacking on an existing network. The company's size has allowed it to quickly adopt the latest advancements in technology that have made equipment lighter and cheaper. And with the Internet becoming nearly ubiquitous, demand is surging for constant connection.

Because many people carry laptops or Internet-ready hand-held devices these days, demand is higher than ever, said Tim Farrar, president of consulting and research firm Telecom Media and Finance Associates. The bigger question is: "How much will they pay?" he said.

Row 44 is named after the last row on a DC-10 commercial jet, considered the most uncomfortable part of the plane because the seats are in front of the bathroom and don't recline. The company came up with the name with the idea that its in-flight Internet service could make the flying experience more enjoyable -- even for the unlucky guy in the last row.

"We want to link passengers to the outside world," said Gregg Fialcowitz, Row 44's president. "Just because you board a plane shouldn't mean you leave Internet connection behind."

The company first got off the ground in 2004 when co-founder Fialcowitz was launching CopperVision, a provider of satellite television to condominium and apartment buildings. Through the endeavor, he formed a relationship with Hughes Network Systems, which operates a network of telecommunications satellites.

As Fialcowitz became more familiar with the technology, he was struck with the idea that Hughes' satellite technology could apply to airliners -- one of the few places left at the time that did not have Wi-Fi capabilities.

He shared the idea with his friend John Guidon, a British-born technology entrepreneur with a private pilot's license. Guidon, now Row 44's chief executive, had worked as an engineer at defense contractors Litton Industries and Marconi Space and Defense Systems. He also founded and ran chip-making firm ComCore Semiconductor in Calabasas before it was sold to National Semiconductor Corp. for $150 million. The pair approached Hughes about harnessing its existing satellite network to connect airline passengers to the Internet.

Hughes liked the idea. Row 44 "opens up a worldwide opportunity for Hughes to supply our advanced broadband satellite technology and services," said Arunas Slekys, Hughes' vice president of corporate marketing. But Fialcowitz still had to convince airlines and investors that Row 44 wasn't Connexion by Boeing.

Row 44's equipment weighs about 150 pounds, much less than what was needed to operate the Connexion service. The Connexion equipment weighed about 1,000 pounds, adding to an airline's operating costs.

The total cost of equipping a plane with the Connexion system ran close to $1 million. Row 44's cost is about $200,000.

Another big difference is that Row 44 could outfit its technology on narrow-body aircraft, whereas Connexion could be carried only on wide-body jets, Fialcowitz said. Because domestic carriers mostly fly single-aisle planes, "Boeing essentially locked itself out of the domestic market," he said.

That helped draw Southwest Airlines -- the nation's largest carrier in terms of number of passengers flown -- and Alaska Airlines this year.

Under the terms of the agreement with Row 44, the airlines decide what to charge passengers for the Wi-Fi connection and pay Row 44 for providing the service. The company declined to say how much it is charging, citing competitive reasons.

The carriers say they're in a pricing "test phase" and have not set the fee structure for the service. Some passengers have been charged as much as $10, but the airlines have been trying out lower prices to see which generates the most users.

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