The airline Wi-Fi provider Gogo has backed down in a contractual dispute with American Airlines, and now intends to put forth a proposal to offer American improved WiFi service on approximately 200 planes.

American would then have the choice of accepting that proposal or switching over to a different service. The carrier has said that it is interested in switching to the WiFi service offered by ViaSat, which is regarded by many as the best in the sky for domestic U.S. routes.

“We plan to submit a competing proposal to install our latest satellite technology, 2Ku, on this fleet,” Gogo said. “ We believe that 2Ku is the best-performing technology in the market and look forward to discussing our offer with American.”

The dispute erupted after American, pursuant to a 2012 agreement signed by the parties, informed Gogo that it was invoking a contract provision under which it could give notice if another provider was offering better WiFi. Per the contract, if Gogo acknowledged that to be the case, it would then have 45 days to submit a competing offer.

Instead, in a Feb. 12 letter, Gogo asked American for more information on the performance on the ViaSat system, which is powered by high-frequency KA-band satellites. ViaSat’s technology is employed by JetBlue, Virgin America and United for a portion of its fleet.

American countered by filing suit in a Texas court that day. The suit asked for the court’s decree that American was correct to invoke its out clause in the contract.

On Wednesday, Gogo submitted its own filing notifying the court that it had rescinded its Feb. 12 letter to American and that it now accepts that its 45-day period to submit a competitive WiFi offer is underway.

Gogo, which controls more than 70% of the domestic market share of airline WiFi, operates the majority of its system on air-to-ground antennae that are only functional once a plane reaches 10,000 feet. The technology offers an average bandwidth of 10 megabits per second (mgps), divided across an entire plane, according to the website Routehappy, which ranks flight amenities.

In contrast, ViaSat says it offers 12 mgps of bandwidth for each device on a plane, a claim that Routehappy agrees with.

Gogo, however, also provides WiFi via airborne satellite, and late last year it introduced the two-antennae satellite service that it calls 2Ku.

Gogo says the service, which is slated to be outfitted on 800 planes, including 250 Delta aircraft, will perform similarly to what a person would experience with land-based WiFi, including offering the ability to stream videos.

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