Philadelphia Wi-Fi Network Hits Snags

[Sunite]

Philadelphia Wi-Fi Network Hits Snags
By Deborah Yao
November 19, 2007 7:38AM

   Digg It!   Bookmark to You are not allowed to view links. Register or Login
Technical problems and restructuring at EarthLink, the ISP that won the 10-year contract to set up and manage the Philadephia network, slowed the process, but its future grew much murkier Friday, with Earthlink's announcement that it is considering "strategic alternatives" -- in other words, a possible sale -- for its municipal Wi-Fi business.

Related Topics
   Philadelphia
   Wireless
   Wi-Fi
   Earthlink
   WiMax

Latest News
   AMD Intros Quad-Core Spider Platform
   Google Mulls Bid for Wireless Spectrum
   Amazon Unveils Kindle E-Book Reader
   Dell Launches Iconic All-in-One PC
   Recycling Electronics Boosts Pollution
Advertisement

Advertisement

   Alfred Zaccaria was finally going to leave the world of dial-up for high-speed access to the Internet without having to pay a lot more for service.

Or so he thought.

A 63-year-old landlord in northeast Philadelphia, he signed up for EarthLink's Wi-Fi Internet service in June for $6.95 a month, a rate that would rise to the regular price of $19.95 after six months. Five months later, he still can't get it to work despite moving his wireless Relevant Products/Services modem from room to room and closer to windows to get a better signal.

"I'm paying them and they're not giving me the service," said Zaccaria, who's stuck with a one-year contract and a $70 modem whose return date has passed. "It seems unjust."

Three years after Mayor John Street announced Philadelphia would be the first major U.S. city to have its own network for wireless Internet access, the project is nearly a year behind schedule and beset by cost overruns.

Technical problems and restructuring at EarthLink Inc., the Atlanta-based Internet service provider that won the 10-year contract to set up and manage the network, slowed the process. But its future grew much murkier Friday, with Earthlink's announcement that it is considering "strategic alternatives" -- in other words, a possible sale -- for its municipal Wi-Fi business.

"Making significant further investments in this business could be inconsistent with our objective of maximizing shareholder value," the company has decided, Chief Executive Rolla P. Huff said in a statement.

Shares of EarthLink rose by 13 cents, or 1.8 percent, to $7.27 amid heavy trading Friday, then climbed another 85 cents, or 11.7 percent, after-hours.

Earthlink, which did not disclose what other paths the unit could follow, said the division is worth about $40 million.

The company has struggled to generate revenue as its dial-up customers have turned to high-speed services. It brokered a joint venture with SK Telecom to form wireless company Helio and launched its municipal wireless service.

Terry Phillis, Philadelphia's chief information officer, said his city's 135-square-mile network is 75 percent complete and EarthLink is committed to finishing it. Earthlink vowed Friday to continue working with its municipal partners.

It's not clear who will own or run Philadelphia's network once it's built, though the city could take it over and find another company to operate it.

Consumer complaints have reached the office of City Councilman Frank Rizzo, who said he also had trouble connecting to EarthLink's Wi-Fi hot spots around the city and has called for a hearing on it.