May 13, 2008

Another Municipal Wi-Fi Service Fails

Just as all eventually will without a serious reimagining of the "business model".

EarthLink Inc. is pulling the plug on its troubled wireless high-speed Internet network in Philadelphia, once touted as a national model.

EarthLink, which pinned its future on municipal Wi-Fi networks following rapid declines in its dial-up Internet access business, said Tuesday that it could not find a buyer for the $17 million network.

It also said talks to give the network to the city or a nonprofit organization had failed, even after offering to pay $1 million in cash and donate the Wi-Fi equipment.

City officials have said it would cost taxpayers millions of dollars each year to operate the network, which will shut down after June 12.

Also Tuesday, the company sued the city in U.S. District Court seeking to remove its Wi-Fi equipment from streetlights and cap its liability at $1 million.

Quite frankly, there is no profit in free wi-fi. Cities simply will not pay enough for private firms to profit, and cities are unwilling (or unable) to sustain it financially. Free wi-fi, therefore will likely remain the province of businesses that offer it as a "value-added" amenity for customers -- or places like public libraries where it is practical to crate a small wireless bubble.

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