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High-tech rumors sometimes amount to little more than hot air, but a new one circulating about Google (Nasdaq: GOOG) doesn't involve hot air -- it involves hydrogen.
That's hydrogen-filled balloons, to be exact, and it appears to be more than a rumor. Google is considering partnering with or even buying a company that provides such balloons as a way to bring wireless access to rural areas, according to a Wednesday story in The Wall Street Journal, which cites people familiar with the matter.
The company in question is Space Data, and Google's interest in it could fit nicely into its new push into the wireless arena, not the least of which has been its recent release with the Open Handset Alliance of the Android open mobile platform.
Google spokesperson Jon Murchinson declined to comment on what he said is "market rumor or speculation." Space Data also declined to comment.
400 Miles of Coverage
Space Data is a Chandler, Ariz.-based firm with clients in the oil and gas, transportation and utilities industries, among others, with wireless access in regions not served by traditional providers.
The company's SkySite network consists of high-altitude, balloon-borne transceivers that are launched twice a day, and that rise to an altitude of 60,000 to 100,000 feet. From that height, each creates a coverage circle of 400 miles.
The network, which uses a portion of the 900MHz band of wireless spectrum, covers Texas, Oklahoma, most of Louisiana and Arkansas, and portions of New Mexico and Gulf Coast waters.
Parachute Drop
Space Data's balloons remain aloft for about 24 hours after they are launched and are relatively unaffected by weather because of their high altitude. The Federal Aviation Administration allows them to be launched without restriction because their small size and light weight -- less than 6 pounds -- pose no threat to aircraft safety, Space Data says.
The balloons are made of biodegradable latex that is designed to vent and return to earth. When that happens, the telecommunications payload returns via parachute to the ground, where it is retrieved with the aid of an attached global positioning system (GPS).
While the balloons themselves are worth only about US$50 each, the transceivers are valued at $1,500, making retrieval critical. Space Data pays a team of hobbyists $100 each to track down and retrieve them once they've landed, the Journal reported.
Enough for Google?
Google's interest in all this stems from the belief that balloons could alter the economics of providing cellular and Internet services in remote areas, the Journal said, citing people familiar with Google's thinking.
Google has also been a vocal participant in the Federal Communications Commission's (FCC's) 700 MHz spectrum auction, which is currently under way.
Yet whether balloons would be the right technology -- if they can be called that -- for Google's purposes is far from clear.
Limited Capacity
"Balloons are high up and offer a large amount of coverage, and that's good and bad," Allen Nogee, a principal analyst with In-Stat, told TechNewsWorld. "The problem is that the capacity is limited, so it usually can only support voice communication."
Space Data notes that it would take 40 cell towers to provide the same span of coverage as one of its balloon-transported transceivers, but "with cellular systems on the ground, each cell can reuse the spectrum over and over," Nogee explained. "The problem with a balloon is that you make the cell really big and put it up high, but you still only have the same capacity for all the people in that cell."
Such coverage can work well in rural areas with a lot of space and few people, but "when you're Google, and for the types of services Google has been talking about, I wouldn't think it would be too ideal because the capacity would be so low," Nogee said.
Not Worthwhile?
Not everyone is convinced the effort is worthwhile, either.
A large part of America's rural population has no wireless access, and significant efforts have already been made to find a way to solve that problem, Bill Hughes, a principal analyst also with In-Stat, told TechNewsWorld.
"There have been a lot of companies putting a lot of money into solving the problem of there not being coverage in certain areas, but the answer is, there just isn't enough money there to make it worthwhile," Hughes asserted.
"It makes sense for the military, which typically brings in its own communications, but for commercial purposes, it seems to be complicated," Hughes added.
Satellite could probably serve the purpose instead, he said.
'Could Be a Great Idea'
Nevertheless, Google isn't exactly known for placing bad bets, so the rationale behind the rumors may simply take some time to be revealed.
"If this technology works well -- I have to say 'if' since I have not seen it and since it is such a far-out idea -- but if it works well, it could be a great idea," telecom analyst Jeff Kagan told TechNewsWorld.
"Google is one of the kinds of companies that could benefit greatly because this will connect many more users," Kagan added. "At this point I have more questions than answers about the technology, but it sure sounds interesting."
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