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5/14/2008
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EarthLink To Pull Philly's Muni Wi-Fi, Anaheim's Days Numbered

The ISP plans to shut down its massive Philadelphia network deployment on June 12, but it's still negotiating its exit with So. Calif. city officials.

Barring some last-minute heroics, EarthLink's drive to get out of the municipal Wi-Fi market appears to be coming to an end as Philadelphia and Anaheim, Calif., prepare to make final decisions on their respective wireless networks.

EarthLink is planning to shut down the massive Philadelphia network deployment June 12, while it's still negotiating its exit from Anaheim with city officials there.

"We're still in negotiations with the city [of Anaheim]," said Chris Marshall, EarthLink's VP of corporate communications. "That's our last market." Marshall added that EarthLink would like to see a buyer take over the network, either the city of Anaheim or an outside party.

Some last-minute behind-the-scenes attempts to save the Philadelphia deployment have apparently failed after efforts collapsed between Wireless Philadelphia and an Ohio nonprofit agency called OneCommunity. OneCommunity was funded by the John S. and James L. Knight Foundation, which has been funding efforts to provide Web access in U.S. cities.

"There have been at least two or three deals that fell apart between EarthLink and OneCommunity over the past week to 10 days," Mayor Michael Nutter told the Philadelphia Daily News. "If you don't have an EarthLink and OneCommunity partnership, it's virtually impossible for Wireless Philadelphia to do anything."

The city bowed out of the deal long ago, and with less than 6,000 subscribers signing up for the Wi-Fi service, the handwriting was on the wall. EarthLink, which has said it has spent more than $20 million on the deployment so far, filed a federal lawsuit asking that its future responsibility be limited to $1 million as specified in a clause in the company's original agreement with the city.

EarthLink has been moving to decommission its municipal wireless networks or turn them over to municipalities or otherwise leave the field since last November when the company announced it would stop investing in the systems. It recently moved to remove its New Orleans wireless system and turn over its Wi-Fi networks to municipalities in Corpus Christi, Texas, and Milpitas, Calif. Other planned deployments in San Francisco and Sacramento, Calif., never got beyond the planning stage.

That leaves its Anaheim deployment sticking out like a sore thumb. The company has indicated it wants to get out of the Anaheim network, too. Initially planned to cover 50 square miles, the Anaheim deployment was originally planned to be operated by EarthLink.

The company's new chief executive, Rolla Huff, has refocused the company on its traditional ISP business, and he has generally been praised by Wall Street analysts for putting the company on a road to profitability.

While most municipal Wi-Fi networks are being decommissioned or drastically downsized, a few have succeeded as new technologies and business models are adopted.

The municipal network in Minneapolis has been successful so far, although it can't reach some 10% to 15% of the city's population as was anticipated from the beginning of the network planning. The city of Augusta, Ga., is launching an ambitious 4-square-mile municipal Wi-Fi network, and city officials have said they learned from the mistakes and problems of failed municipal networks.

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