Airlines can't afford to spend money on much of anything besides fuel these days, but that's not stopping them from pouring money into broadband technologies that will deliver in-flight entertainment and Internet access. Most of these systems are still in the test phase, but airlines are hoping that once up and running, passengers will pay for them, generating some much-needed cash.

The research indicates that they've got it right. According to a report from Multimedia Intelligence, sales of in-flight digital broadband will likely exceed $1 billion by 2012. As of now, two different technologies have emerged. Air-to-ground (ATG) uses frequencies allocated by the Federal Communications Commission to transmit signals from an airplane to a ground station, a sort of WiFi in the sky; while satellite systems transmit signals using a data transceiver/router, satellite antenna, and 802.11b access points.

One key advantage to satellite is its availability -- it will work over water and in areas without ground stations, and is considered by some to be more robust. Air-to-ground providers counter that because their service operates using existing infrastructure, it costs less to operate.

Now that airlines seem committed to in-flight internet, different players are jockeying for position. AirCell will outfit American Airlines' transcontinental 767 fleet with its air-to-ground product, while Southwest will begin testing a system by a company called Row 44 later this year. And JetBlue announced this week that it's pumping up its LiveTV operation by buying Verizon's Airfone network (Yeah, Airfone. The guys behind those clunky seatback things that you've never actually seen anyone use).

On the international side, Lufthansa has teamed up with T-Mobile, satellite operator SES Global and signal processing equipment maker ViaSat to offer a satellite based service. In 2004, Lufthansa was a launch customer for Boeing's Connexion service, and got burned when the Boeing shut the whole thing down two years later.

For those worried about endless hours of coach class chatter, fear not. US carriers don't plan to allow in-flight voice calls, though several foreign airlines are toying with the idea (we tried the service that Air France is testing on European flights, and let's just say it needs some work).

There hasn't been much news about how airlines plan to charge for these services, or if some will offer them for free, ala JetBlue's DirecTV. But with money too tight to mention at most airlines these days, you've got to assume it's the latter. And that brings up another good point. These services cost money to test, install, and operate. If the industry's cash crunch gets bad enough, in-flight broadband might be mothballed before it's even gotten off the ground.

by Dave Demerjian for Wired.com

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