I suspect the picocell will attract the phone's attention (rather than loudly broadcasting for other networks). Thus the only network the phone will find is the one provided by the airline. This is unless the user keeps selecting manual scan.
Am thinking if you could come up with pay as you go system for this it could save a lot of weight if you could go without handsets in all seats.
I agree you should only be able to talk in a booth but it's fair enough to allow Blackberries ("Crackberries") and other GSM capable text usages as long as alert sounds are not disruptive.