By Pacific Coast Business Times Staff Friday, May 23rd, 2008

Row 44, a Westlake Village-based company that makes wireless broadband systems for commercial airplanes, has raised more than $21 million.

By the end of June, Row 44’s technology will connect to the Internet on an Alaska Airlines jet and four Southwest Airlines jets. “Assuming those trials are successful, we’ll do fleet-wide deployments” with Southwest and Alaska, said Gregg Fialcowitz, Row 44’s president and co-founder. The deal was announced May 19. The company employs about 25 and will use the recent $21 million for its U.S. rollout. Fialcowitz said Row 44 will seek another $10 million to $15 million financing later this year for its international plans. Boston-based hedge fund PAR Capital Management, which invests in consumer-related industries, led the A-series financing round. Ed Shapiro, its vice president, took a seat on Row 44’s board of directors. PAR also holds a $5.6 million investment in Carpinteria-based CKE Restaurants. Row 44’s funding round, the largest in the region so far this year, comes amid a rush to bring broadband to the skies in 2008. At least five airlines have declared they will offer airborne connectivity. Alaska and Southwest have partnered with Row 44, and the Westlake Village company is in talks with at least one other airline. Fialcowitz couldn’t reveal which airline might be next. But he said his company linked with PAR through talks with an airline that knows Shapiro. That hints that Row 44’s next partner could be one of the airlines in which PAR holds investments: ExpressJet Holdings, Northwest Airlines, US Airways Group or Delta Airlines, all of which have been silent about wireless broadband plans. Last month, Shapiro left the board of US Airways. PAR also holds a stake in JetBlue, which will go head-to-head with Row 44. Last year, JetBlue teamed with Research in Motion and Yahoo!, laying plans to offer free in-flight e-mail and instant messaging. Virgin America and American Airlines inked a deal with a company called Aircell to provide in-flight broadband access. All plan to roll out services over this year and next. But the Row 44 system uses technology that’s faster, lighter and has greater coverage than competitors, Fialcowitz said – all features he hopes will help it take off. To save airlines fuel, Row 44 pared its system to the bone: an antenna that creates 56 pounds of drag and less than 150 pounds of internal electronics. An older system built by Boeing weighed 800 pounds – the same as about 16 jam-packed suitcases. “Our system is in essence the same cost to the airline as carrying a 200-pound man around,” Fialcowitz said. The Row 44 system also lets airlines keep a plane on its normal schedule during installation. It takes two overnight maintenance shifts to put in the system, and the nights don’t have to come in a row. The older Boeing technology took months to put in. Row 44 says it can also cover larger areas than its direct competitors, Aircell and LiveTV, the JetBlue subsidiary handling that firm’s broadband access. Both use air-to-ground technology and slices of the digital spectrum licensed from the Federal Communications Commission. Air-to-ground technology brings up two problems, Fialcowitz said. Aircell and LiveTV have to build a network of towers, which are difficult to construct in the ocean. That means limited service flying internationally. Also, Fialcowitz said, Aircell and LiveTV will have to buy slices of spectrum in any countries they want to serve. Row 44 uses communication satellites in orbit, erasing borders and spectrum concerns. The company will start by blanketing North America, from Canada to Mexico. By next year, the company will light up transponders for Northern Europe and the Middle East. By 2010, it plans to cover Asia and the Pacific Ocean. Mobile satellite-based broadband already exists. But that technology wouldn’t work for aircraft, so Row 44 started from scratch, using something more akin to the satellite antennas on houses. “Our biggest challenge was to make an aircraft look like a house [to satellites],” Fialcowitz said. Air-to-satellite technology brings faster transfer speeds than air-to-ground systems. Row 44 estimates download speeds of about 30 megabits a second, compared to less than 5 megabits per second for Aircell technology. You’ll be able to browse the Internet or watch live television with Row 44’s system. And, in theory, you could use a broadband-enabled phone, such as newer BlackBerries or Skype units, to make calls. But even if calls are technically possible, airlines might not allow them. “It turns out that North American carriers hate the idea of cell phone calls,” Fialcowitz said. “Do you really want somebody yakking for five hours on a flight across the country? If [the airlines] asked us to, we could actually kill voice calls.” Row 44 can keep us safe from yakkers, but can it keep us safe from hackers? Would adding wireless broadband to airlines open security holes to cyber-pirates of the sky? “The short answer is no – there will be nothing mission critical that will travel on this link or even have access to this link,” Fialcowitz said. “If a federal agency had a search warrant and wanted to tap a connection, they could. The system is absolutely designed to work with federal agencies. Since 9/11, there’s a rash of new requirements for a public mobile system like this.”