More Than 15,000 Flights

Each balloon rises 20 miles, carrying a small box of electronics that perform as a miniature cell tower. The company said it has flown more than 15,000 flights over the southwestern U.S. since 2004. In addition to well monitoring, vehicle tracking, and pipeline monitoring, the balloon network will soon be used for such applications as monitoring diabetes reading via wireless PDAs for members of the Navajo Nation in Arizona.

According to Space Data, one balloon can cover an area that would otherwise require 40 cell towers. But the catch is that each balloon usually has a life span of about 24 hours before it pops in the thin, upper atmosphere. A light parachute lowers the Styrofoam-encased box of electronics safely to Earth, usually on command from Space Data.

Consequently, the company needs to continuously supply its target area with a stream of new balloons. According to the Journal report, mechanics at small airports and dairy farmers are employed by Space Data to keep its crop of balloons current.

Space Data also hires about 20 hobbyists with Global Positioning System tracking devices to find the transceivers after they've descended. The balloons are worth only about $50, but the transceivers are valued at about $1,500. Rescuers are paid $100 for each recovered transceiver.

Out-of-Box Thinking

While both Google and Space Data declined to comment, the Journal said Google believes balloons could "radically change" the economics of Internet and wireless services in rural areas. Google has been a highly visible participant in the Federal Communications Commission's auction for the 700-MHz band and has been aggressively moving into mobile devices.

Space Data is not just about balloons. Earlier this month, it entered into a joint venture to be the licensee of nearly 2 MHz of the 900 MHz band, for specialized mobile radio networks required by industrial customers during crises. The company said the bandwidth could also be used for low-cost applications, such as nationwide distribution of gaming content or meter reading.

Peter Jarich, an analyst with industry research firm Current Analysis, said Space Data's business model is "based on the idea that some wireless networks have gaps in their coverage" and the company originally targeted paging as the service it would provide.

The value is coverage in remote areas that would otherwise be expensive to provide, he said, adding that this out-of-the-box thinking is "exactly the kind of thing you'd expect from Google."