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Up, Up, and Away

Jerry Knoblach '85 plans to use weather balloons to provide wireless service to rural areas.

Sometimes the most elegant solution to a challenging technical problem is right under your nose--or rather, over your head. Just ask Jerry Knoblach '85, co-founder, chairman, and CEO of Space Data Corporation. Knoblach has devised a way to use weather balloons--much like those used by the National Weather Service for decades--to fill the gap in wireless communications coverage across rural America.

Eighty percent of the population lives on 10 percent of the landmass, explains Knoblach. Since the wireless market is about $77 billion annually in the US , the remaining 20 percent of the population represents a significant market. "There's potentially $14 billion of revenue that's lost every year just because there isn't a good technical solution for providing the same quality and cost level of service to rural areas as you see in urban areas," he says.

Cell towers cost up to $300,000 to build and cover a range of about 12 miles, so the number needed to fill the gap is financially untenable. And because even the lowest satellites are over 470 miles up, they would require a far more powerful signal--and hence bulky equipment for wireless consumers.

Space Data's solution is the SkySite, a small radio transceiver enclosed in Styrofoam connected to a biodegradable latex weather balloon. Each SkySite can be launched to a height of 100,000 feet, where it remains for up to 24 hours, providing coverage to a 180-mile range. By operating in constellations, with launches every 12 hours, SkySites could provide ongoing wireless service nationwide, because they work in concert with existing towers. At $300 per launch, Knoblach estimates it would cost roughly $15-20 million per year to provide the service.

The technical challenges of developing compact, lightweight microelectronics (SkySites weigh less than 6 pounds, so they can't damage aircraft on their descent back to earth) have been relatively easy compared to other hurdles. Knoblach and his MIT co-founder Eric Frische '85, vice president of technology and CTO, also had to attract investors, purchase wireless spectrum, and gain acceptance from regulatory agencies like the FAA and FCC.

"Eric and I joke that it's only because we have a couple of MIT degrees between us that people actually let us in the room and didn't think we were nuts when we started proposing putting wireless equipment on weather balloons. After they listened for about a half-hour they said, 'Wow, this actually makes a lot of sense,'" Knoblach says.

Since Knoblach and Frische founded the company in 1997, they've raised $22 million from investors ("the old fashioned way--eyeball to eyeball," Knoblach notes) and now have 35 employees at their Chandler , Arizona facility.

The company plans to phase in service gradually. The first phase is a regional launch program this spring in Texas and Oklahoma. Four balloons will remotely monitor wells for the oil and gas industry. The constellation could be used for other telemetry applications, like monitoring irrigation or alarm systems. The second phase includes enhanced coverage for palm pilots and two-way wireless e-mail. Space Data hopes to expand to a national wireless voice and data network within a year, as funding allows and the SkySite system matures. Essentially, the company will wholesale air time to wireless carriers, who can then offer the expanded service to consumers.

Space Data has also partnered with Native American tribal governments to build wireless infrastructure on their lands. Knoblach foresees many beneficial wireless applications for tribal nations. For example, those suffering from diabetes could track their diet, exercise, and glucose levels and relay the data to a remote clinic via a Palm Pilot, where it could be monitored by a doctor.

"It's always been my desire in life to basically take a new technology and build it into a business that takes it to market and improves peoples' way of living. MIT gave me the kind of broad technical background to do this," Knoblach says.

His Harvard MBA probably hasn't hurt the company's chances of success, either. Knoblach jokes that there are two kinds of companies. "There's the classic MIT company where the technology is so brilliant, an idiot could sell it...and then there's the classic business school company where the guy could be selling dirt, but he does it so well he can sell dirt and make money at it," Knoblach says with a laugh. "What we'd like to do at Space Data is have a company that has the best of both worlds."