After three weeks of bidding, the FCC awarded wireless spectrum to both JetBlue and a joint bid by PE firm AC BidCo and AirCell, which provides data and voice service for aircrafts via satellites. AC BidCo and AirCell agreed to pay $31.3 million for three megahertz of spectrum, while JetBlue offered $7 million for one megahertz of spectrum. FCC rules bar JetBlue from discussing plans for the spectrum, but many speculate the airlines will use it for more in-flight video entertainment and Internet services. The company already offers DirecTV on its flights.
The auction included much of the spectrum currently held by Verizon unit Verizon Airfone, which dropped out of the bidding early on, so it must make the spectrum available to JetBlue by 2010. Verizon Airfone's unpopular in-flight calling service seemed too expensive to be sustainable.
For more on the recent spectrum auction:
- read this WSJ article (sub. req.)