Floating a New Idea For Going Wireless

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PAGE ONE

Floating a New Idea
For Going Wireless,
Parachute Included

Balloon Launch Gets
Google's Attention;
Dairy Farmers Can Help

By AMOL SHARMA
February 20, 2008

CHANDLER, Ariz. -- Jerry Knoblach wants to bring wireless service to millions of rural Americans. His plan: Beam it down from balloons hovering at the edge of space.

This isn't just hot air. His company, Space Data Corp., already launches 10 balloons a day across the Southern U.S., providing specialized telecom services to truckers and oil companies. His balloons soar 20 miles into the stratosphere, each carrying a shoebox-size payload of electronics that acts like a mini cellphone "tower" covering thousands of square miles below.

Cheap, disposable hydrogen-filled balloons carrying miniature versions of cellphone towers may soon provide service to rural, sparsely populated areas. WSJ's Amol Sharma visits Space Data, a company that makes the specialized balloons.

His idea has caught the eye of Google Inc., according to people familiar with the matter. The Internet giant -- which is now pushing into wireless services -- has considered contracting with Space Data or even buying the firm, according to one person.

Mr. Knoblach, Space Data's chief executive, declined to comment on specific partners. Google declined to comment.

Expanding rural telecom services is a priority for regulators. About 36% of rural Americans don't have Internet connections. The problem is that it's expensive to string cable or build cellphone towers in areas with so few customers. Space Data says a single balloon can serve an area otherwise requiring 40 cell towers.

Maintaining a telecom system based on gas-filled bladders floating in the sky requires some creativity. The inexpensive balloons are good for only 24 hours or so before ultimately bursting in the thin air of the upper atmosphere. The electronic gear they carry, encased in a small Styrofoam box, then drifts gently back to earth on tiny parachutes.

This means Space Data must constantly send up new balloons. To do that, it hires mechanics employed at small airports across the South. It also hires farmers -- particularly, dairy farmers.

They're "very reliable people," says Mr. Knoblach. They have to "milk the cows 24-7, 365 days a year, so they're great people to use as a launch crew." Space Data pays them $50 per launch.

Extra Pocket Money

Sharon Hodges, a 60-year-old cattle-and-wheat farmer in Piedmont, Okla., and part-time balloon launcher, says she doesn't know much about technology but liked the extra pocket money.

Every day just before sunset, she unfolds a deflated balloon, attaches it to a hydrogen tank and inflates it to about 6 feet in diameter. Then she hitches the electronic payload to the balloon, walks it through the 16-foot-tall double doors of her barn, and lets go of it.

The balloons rise about 1,000 feet a minute and reach their target altitude of 65,000 to 100,000 feet in under two hours.

Not the Hindenburg

Most of Space Data's balloons are filled with hydrogen, because it is cheaper than the helium used in toy balloons and modern blimps. Hydrogen is, of course, flammable, but Mr. Knoblach says there's no safety issue because each balloon contains so little gas. "It's not like the Hindenburg," he says.

A balloon being launched in Piedmont, Oklahoma.

Mr. Knoblach also dismisses another potential hazard: Airplanes crashing into balloons. He points out that Space Data's balloons are similar in design to weather balloons, about 1,800 of which are launched world-wide every day without problems.

According to a Federal Aviation Administration official, there are no records of passenger jets colliding with balloons in the U.S. The engines of a commercial jet are designed to withstand the ingestion of an eight-pound bird, the FAA says. (The payload on a Space Data balloon weighs six pounds.)

Google believes balloons like these could radically change the economics of offering cellphone and Internet services in out-of-the-way areas, according to people familiar with its thinking. The company is among the registered bidders for a big chunk of radio spectrum at a government auction currently under way in Washington.

At Space Data's command center in Chandler, engineers track their 10 balloons on a wall-mounted electronic map. Balloons move slowly across Texas, New Mexico, Oklahoma and Arizona, where Space Data sells wireless services used by truckers to track their fleet. Overlapping rings on the map demarcate the coverage area of each balloon's transceiver.

When a balloon approaches the end of its useful life, technicians send a signal to separate it from its electronic payload, which parachutes to earth. The balloons eventually burst into "confetti" from the low air pressure, Mr. Knoblach says.

The environmental ramifications of the resulting shower of latex balloon scraps are complex. Some environmentalists argue balloons can be fatal to turtles, fish and whales, which mistake floating latex for jellyfish or other edible sea life. Several states, including Florida and Virginia, restrict balloon launches.

Dale Florio, a spokesman for the Balloon Council, a trade group for balloon makers, says latex balloons biodegrade "at the rate of an oak leaf that falls from a tree."

Net Benefit

Mr. Knoblach says his operation was reviewed by more than a dozen federal agencies, which found no significant environmental impact. Some agencies even consider it a net benefit, he says: The balloons replace tall cellphone towers, which are blamed for killing a significant number of migratory birds that crash into them.

While the balloons are cheap and disposable at $50 a pop, the transceivers they carry are worth about $1,500. Once a transceiver is released from its balloon to parachute back to earth, there's no way to predict where it will land. So Space Data has hired 20 hobbyists with GPS devices to track them down.

Recovery missions can get intense. Workers have had to pluck transceivers out of trees in Louisiana, rappel down rocky cliffs in Arizona, trudge through swamps and kayak across ponds. Space Data pays them $100 per transceiver recovered.

"These things can fall anywhere," says Chip Kyner of San Antonio, who once hiked seven miles before finding the transmitter he was looking for. The final mile was in pitch darkness.

"It wasn't worth the $100," he says, "but it's a neat story."

Write to Amol Sharma at amol.sharma@wsj.com