Weather balloons to plug wireless gaps

June 22, 2002 Posted: 11:14 AM EDT (1514 GMT)

Space Data Corp.'s Jerry Knoblach, left, and David Wu want to create a more economical wireless network by using weather balloons.

CHANDLER, Arizona (AP) -- Space Data Corporation isn't the first company to come up with a pie-in-the-sky idea promising to bring seamless wireless service to rural America.

Some have proposed filling the coverage gaps by launching communication equipment on blimps, rockets and solar-powered gliders. As yet, for a slew of financial and technological reasons, none has proven feasible.

But Space Data says its plan to create America's first floating wireless network -- by putting disposable transmitters on government weather balloons -- has already undergone successful testing and is economically viable.

A trial run with text-messaging service in the Phoenix area is slated for this summer. The official launch of the messaging service would begin next spring in Arizona, New Mexico, Texas and Oklahoma, extending nationwide by the end of 2003. Cellular phone service could be added a year later if the company secures more funding.

'Poor man's satellite'

For the last 60 years, the National Weather Service has launched 70 balloons across the country twice a day to collect temperature, humidity and wind data. The balloons typically hover at about 100,000 feet for about 24 hours.

Because the balloons are launched every 12 hours, there would always be at least one of Space Data's packages floating in the stratosphere above each coverage zone, assuring uninterrupted service for all rural areas in the continental United States, said Jerry Knoblach, Space Data's chairman and chief executive.

Space Data, based in a Phoenix suburb, has raised $13.5 million from private investors, and has been discussing the idea with the weather service since January 2001, Knoblach said.

Knoblach hopes to arrange a barter deal: In exchange for letting the company hitch a ride on the balloons, weather officials would use the satellite-based tracking system on Space Data's network to gather wind and other data more precisely.

"The goal is that no money actually changes hands," said Knoblach, who described the weather service's response as positive.

Weather service spokesman John Leslie confirmed discussions with Space Data have taken place, but said they have not progressed to the level of negotiations.

If the government doesn't approve Space Data's proposal, the company will proceed with the endeavor by launching its own balloons, Knoblach said.

Space Data's service, known as the SkySite Network, would benefit roaming customers and those who live in rural areas where wireless service currently isn't available, he said.

The service would be sold to existing wireless companies who have gaps in their network coverage.

"We would be the carrier's carrier," Knoblach said.

While nearly everyone in the country now has access to at least one cellular service where they live, there are still huge swaths of unpopulated and rural land where there's no wireless signal.

Wireless carriers are not rushing to fill such gaps because there isn't enough business in sparsely populated areas to justify the hefty expense of installing and operating a wireless tower.

"This is really a poor man's satellite," Knoblach said.

Hopes for seamless coverage

As he explains how the SkySite works, he admits the idea sounds far-fetched at first blush.

Each of the weather balloons could provide service to an area of about 100,000 square miles. The resulting overlap in coverage between balloons would enable ubiquitous wireless service throughout the country, Knoblach said.

By contrast, the signal from a wireless tower typically covers from 100 to 150 square miles.

The company estimates its annual operating expenses at $35 million per year. About half of that would go toward equipment: $300 worth for each of the 50,000 or so balloons that would be launched over the course of a year.

Since the chance of finding a balloon once it falls back to earth is remote, the company isn't counting on getting any equipment back once it is launched.

Jonathan Atkin, an industry analyst for RBC Capital Markets, said the key to Space Data's success will be in its ability to contain operating costs while providing adequate returns to wireless carriers. He also said the company will have to convince carriers that the weather balloons are reliable enough to keep Space Data's network gear in the air for consistent coverage.

"What the wireless companies want to do is provide good service to their customers," Atkin said. "If they can leverage Space Data's service to fill in gaps in their own coverage then there's no reason why this shouldn't come into consideration."

Meanwhile, Space Data is pushing ahead.

In November, the company won the rights to use a designated frequency of 1.4 MHz in a Federal Communications Commission auction.

Space Data doesn't expect any obstacles from the Federal Aviation Administration. Under existing FAA rules, balloons can be launched in domestic airspace as long as the balloon and its contents weigh less than 6 pounds -- a requirement the SkySite package meets, Knoblach said.

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