from the monopolies-lecturing-monopolies dept
That's something GoGo CEO Micheal wasn't all that apologetic for last year when fielding complaints that GoGo had effectively mutated into "Comcast at 35,000 feet":
“We’re starting to have millions of users, so it’s getting more and more congested, and we have raised prices, which you typically do when you have more demand than you have supply,” he said. “There’s nothing to apologize for. We have trouble finding a business in America that does anything differently.”Apparently American Airlines, no stranger to not apologizing for awful service, thinks there's definitely something to apologize for. The airline has filed a lawsuit in Texas (pdf) stating the company will be making use of a contract clause to switch to a better in-flight broadband alternative. The full lawsuit offers a few reasons for the shift, most notably that customers paying an arm and a leg to share 3 Mbps of bandwidth aren't particularly happy about it. Some new satellite-based alternatives are emerging, which American thinks would be a better fit for customers who want the Internet to work:
In contrast with Gogo’s legacy air-to-ground system that uses cell towers, many of these new competitors offer faster and cheaper in-flight connectivity services using satellite-based technology. Whereas Gogo’s system provides 3 Mbps (or at most, 10 Mbps) of bandwidth shared among all users on a flight, and blocks most video content, these new satellite-based services offer 12 Mbps per device—more than enough for passengers to stream music, movies, and television. Also, with antennas facing up to satellites, instead of down to cell towers, these competitors can offer gate-to-gate WiFi access for customers, even over oceans.Granted some of this is just the laws of physics; delivering a consistent, quality broadband signal at 30,000 feet isn't exactly cheap or easy, and in-flight services regardless of technology will always be relatively expensive and throttled. Still, it's pretty clear there's some captive-market apathy at play for GoGo, which is facing a 2014 class action for violating antitrust law (pdf), and recently settled another class action accusing the company of repeatedly billing customers who thought they were only signing up for one month of service.
American claims this new lawsuit was necessary after GoGo effectively ignored the company's previous notices that it wanted to switch operators. A GoGo SEC filing suggests the company doesn't deny the contract clause exists, but insists the company is working on its own, 2ku-based satellite broadband platform (which should offer closer to 70 Mbps per plane):
Earlier this month, American notified Gogo that it considers a competitor’s connectivity service to offer a material improvement over our early generation air to ground service with respect to a portion of American’s fleet representing approximately 200 aircraft. We plan to submit a competing proposal to install our latest satellite technology - 2Ku - on this fleet. We believe that 2Ku is the best performing technology in the market and look forward to discussing our offer with American.In other words, however the lawsuit ends, customers should hopefully see better GoGo service -- just not without a lot of kicking and screaming first. While we wait, we can just enjoy the irony of one of the least liked companies in one of the most despised industries giving lectures on captive market innovation and competition.