JetBlue to Buy Towers From Verizon: Report

The Wall Street Journal says JetBlue's LiveTV unit, which operates the airline's in-flight entertainment, will buy Airfone in order to allow passengers access to email and broadband Internet services.
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JetBlue Airways

(JBLU) - Get Report

will acquire air-to-ground communication towers from

Verizon's

(VZ) - Get Report

now-defunct Airfone network in order to boost the company's digital offerings on its airlines, according to a report.

The Wall Street Journal

said Monday that JetBlue's LiveTV unit, which operates the airline's in-flight entertainment, will buy Airfone in order to allow passengers access to email and broadband Internet services. Cell phones will still be forbidden from being used on planes, though. Both companies declined to disclose a price tag for the deal.

Airfone, which was the only incumbent service provider in the 800 MHz air-ground band, operated the seat-back phones on carriers until 2006, when the Federal Communications Commission reauctioned the spectrum Airfone held. LiveTV was one of the winners of the FCC's auction.

In December, JetBlue paid a fee to Airfone in order to begin testing free broadband services on one of its A320 planes. Passengers with Wi-Fi enabled laptops or two models of

Research In Motion's

(RIMM)

BlackBerry smart phones are able to use the service, which also includes the ability to browse and shop on

Amazon.com

(AMZN) - Get Report

.

Competition to JetBlue's service is expected to grow heavily. American Airlines parent

AMR

(AMR)

and Virgin America both have partnerships in place with privately held Aircell, which has built its own network of air-to-ground towers using spectrum Airfone previously used. Additionally,

Continental Airlines

(CAL) - Get Report

said it has forged a deal with LiveTV to offer broadband services on its newest planes.

The report added that air carriers are struggling with the decision to charge customers for access to the broadband features given ballooning fuel costs.

Shares of Verizon were lately down 5 cents, or 0.1%, to $38.18. Among related stocks,

AT&T

(T) - Get Report

added 0.8%,

Sprint Nextel

(S) - Get Report

was down 0.7%, and

Deutsche Telekom

(DT) - Get Report

slipped 0.3%.

As for the airlines, JetBlue was falling 5 cents, or 1.3%, to $3.99. Continental was climbing 0.7%, while AMR was slumping 1.5%.