By Nick Mitsis

Even though The Boeing Company decided to shut down its high-speed broadband communications offering, Connexion by Boeing, in August, the move may have been one of the company’s strongest. Closing departments, services or business plans is always challenging and rarely viewed as a positive in the eyes of the industry, but when revenue is slow to generate, market conditions change and demand dips, it is fiscally and intellectually better to cut losses sooner rather than later.

We recently reported on the company’s successes and outlined that even though Boeing unveiled the service in 2001, its business plan, which included investments from three U.S. airlines, had to be changed after the Sept. 11, 2001, terrorist attacks on the United States which placed the airlines under a financial strain. The service eventually debuted in 2004, finding a market with international airlines, business jets and with governments, but the U.S. airlines never returned and Connexion has not come close to meeting Boeing’s financial expectations.

Although the Connexion service was generating some revenue (roughly $320 million, representing $0.26 per share as last reported prior to us going to press), such financial performance was not going to be enough to sustain a long-term, commercially-viable business plan. The technology of the Connexion service, however, did succeed and remains an asset that should not be dismissed. Once again, satellite industry innovators proved that with a bit of imagination, connectivity could happen anywhere with consistent, robust quality. Connexion by Boeing enabled true broadband service including video broadcasts, on aircraft with minimal signal drop or degradation. Engineers delivered a product that was relatively inexpensive to install given the technical specifications and performance benchmarks. Therefore, Connexion should not be considered a market failure because, like others before it, drastic market changes occurred that nullified a sound business plan.

So if focus centers on its technology, new service opportunities may be on the horizon.

That is where the government comes in. The U.S. Military demand for commercial satellite services continues to remain strong and the military continues to try to bridge the bandwidth gap between its internal satellite-enabled technologies and that of the commercial sector. Recent years have shown, and future forecasts predict that more commercial bandwidth will be procured by U.S. and foreign governments for data and video services.

New applications under development could benefit greatly from the Connexion technology. With the War on Terror continuing, mobile data and video demand increasing, and the next-generation unmanned aerial vehicles (UAVs) gaining momentum, such services would fit nicely with this technology. UAVs run on Ku-band at high altitudes where data and video have to be relayed back to central command. The Connexion system can remain operational if the military decides to treat Connexion by Boeing the way it treated Iridium back in the late 1990s. One of the main reasons for Iridium’s turnaround was the government investment in the technology. Following the resurrection and creation of the New Iridium, the U.S. Department of Defense became the anchor tenant, enabling the commercial company to grow its services in some specialized private sector markets and make significant headway in emergency response applications.

Whatever the future holds for Connexion, hopefully it will not go by the wayside. Such innovation and technological advancement should be retooled and used by global forces to not only satisfy their needs, but to also foster commercial industry growth.