Earthlink has abandoned its original business strategy for municipal wireless networks. “We’re also beginning a dialog with the municipalities that we’ve partnered with, and that we’re considering partnering with,” said Earthlink President and CEO Rolla P. Huff. “The Wi-Fi business as currently constituted will not provide an acceptable return … We’re going to look for municipal governments to step up and become a meaningful anchor tenant on completion of the build,” Huff added.
The review came amid contract negotiations with San Francisco, whose mayor, Gavin Newsom, voiced frustration over the hold-ups from the Board of Supervisors and revealed that the city lacks a back-up plan if Earthlink and Google withdraw from the project.
Muni-wireless expert Craig Settles said EarthLink’s announcement could bring “some sanity” in WiFi project talks. “If there’s hope for this industry, it’s that more cities will start serious benefit analyses within governments of the impact of muni wireless on operations, as well as conduct similar analyses within business, medical and education constituencies that could all be anchor tenants,” Settles remarked. “San Francisco, unfortunately, may not be demonstrating good judgment if they dismiss anchor tenancy out of hand unless they still have their sights on owning the network. I’m surprised — sort of — by the smaller cities that stomp their feet and pout like petulant kids, refusing to even discuss buying services because they think their cities deserve a free ride.”