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Ensuring failure


By Scott Bradner

Im no economist but even I can predict catastrophic failure when the plan is this dumb.  News Corp and Boeing expect you to pay almost as much for Internet access in an airplane as you pay for the seat you sit in.


I fly a lot, actually I fly rather too much.  Trying to keep up with email when I spend so much time in airplanes is a pain.  It usually means late nights and early mornings at the hotel.  The hotel connections are finally getting better.  A quarter of the hotels I stay at these days do have "high-speed" Internet access in the rooms.  Just plug your laptop into the Ethernet jack, do a dance with the web browser to agree to pay for it and away you go.  And this service is priced right at around $10 per day.  But all the time in the plane still means lots of time catching up.  It would be real nice if I could get Internet access for reading email and doing a bit of surfing while zipping along at 35,000 feet.


Actually there is a way to do this today.  You can plug your laptop into the phone in the back of the seat in front of you and use it to dial your favorite ISP.  But this is slow and quite expensive even at the "special rate" of $1.99 per minute.  A few years ago I got a special deal, since discontinued, of a single flat annual payment for all the connection time you could use.  I did use that quite a bit and that did get me to bed a few hours earlier.


So I was happy to hear that Rupert Murdoch's News Corp had gotten together with Boeing to develop a satellite-based in-seat Internet access service.  Even though the latency inherent in satellite-based Internet access systems is far from ideal it would still be very helpful in keeping me awake during early morning meetings since I could get more sleep.


A few weeks ago the Wall Street Journal had an article on the proposed service and I'm no longer so happy.  According to the Journal the cost of this service is projected to be between $17.50 and $25 per hour.  That means on a 6 hour cross country flight you could easily pay more for the connectivity than you paid for your stay-over-Saturday-night fare.  Note that pricing it the same as the phone is not a technical requirement since data connections, unlike voice ones, share the same circuit.


Since the equipment costs the same for one or 10 users, pricing to ensure they get less than one user seems rather brain-dead.  The same service with a $10 per flight charge would get a lot of takers, but that would be too logical.


disclaimer:  Officially Harvard does not do "brain-dead" but , in any case the above rant is mine.