Phillys Wi-Fi Contract May Be a Lifeline for EarthLink

EarthLink comes up with a much-needed victory by being chosen to build a metropolitan-area Wi-Fi network in Philadelphia.

EarthLink made IT history of sorts—and probably saved its own skin—Monday night when it was selected to build the nations first metropolitan-area Wi-Fi (wireless fidelity) network to provide high-speed wireless Internet access across the city of Philadelphia.

EarthLink Inc. was chosen by Wireless Philadelphia, a nonprofit group commissioned last year by Mayor John Street to oversee development of a citywide Wi-Fi network.

Hewlett-Packard Co., Palo Alto, Calif., known more for its business computing hardware products than for Wi-Fi expertise, was the other finalist.

EarthLink, based in Atlanta, has agreed to pay for the construction and maintain the network, which is expected to cost between $15 million and $18 million, said the citys chief information officer, Dianah Neff.

Subscriptions to the broadband service will start at $20 per month, with city-determined, low-income residents eligible to pay half that amount, the city said.

In effect, the new Wi-Fi broadband service will become another city utility.

"This is good news for the company (EarthLink) that has been sorely in need of some," wrote longtime Wi-Fi broadband blogger/consultant Om Malik. "It could become the harbinger of things to come, and how cities decide to move forward when considering Wi-Fi plans.

"I think the decision will also decide the fate of many parties—including startups like Tropos Networks, who will end up finding a market for their mesh-networking gear.

"EarthLink has a lot riding on this," Malik continued. "The dial-up business is shrinking, and the Brand-X decision has put the company in a bit of a pickle. It needs muni-wireless to work, for its survival."

Calling itself "the nations next-generation Internet service provider," EarthLink already serves more than 5 million subscribers around the United States.

/zimages/4/28571.gifGoogle tests secure Wi-Fi service in Calif. Click here to read more.

The company also offers dial-up, high-speed, voice, Web hosting, home networking and security.

However, its rate of subscriber growth has slowed greatly in the last two years. Earthlink—among other Internet service providers—also suffered some heavy blows at the judicial level this past summer.

Courts ruled ISPs couldnt have access to cable broadband networks via the Brand X decision, and FCC policy ensured they wouldnt be allowed to share DSL and fiber networks at discounted rates.

It has been clear from the beginning of the process, which started in February 2005, that the financially strapped city of Philadelphia was not going to build its own systems of towers and transmitters, and that the winning vendor was going to have to shoulder that load.

"EarthLink is going to be putting up the financing, and there will be a revenue stream that comes to Wireless Philadelphia so we can do our digital-divide programs," Neff said at a press conference Tuesday.

"About 60 percent of the neighborhoods dont yet have high-speed data service. The city aims to fill in gaps in broadband availability, such as in low-income neighborhoods," said Neff, who also is acting chairwoman of the nonprofit Wireless Philadelphia group.

Neff said the city expects about 85,000 users to subscribe during the first year. Verizon now offers dial-up for $15 per month in the city; about 174,000 households are using that service at this time, Neff said.

When the arrangement is finalized in about 60 days, Neff said, EarthLink will lead a team that will build and maintain the wireless system citywide.

EarthLink will then lease portions of it to other Internet service providers, which will be in competition to provide city residents and businesses with access.

"Wireless Philadelphia represents an important milestone in the deployment of wireless broadband in the United States on such a wide scale," said Garry Betty, EarthLinks president and chief executive officer.

"It provides a competitive alternative to high-speed Internet offerings and gives many Internet users the ability to stay connected, no matter where they are in the city."

The city said the infrastructure will be built using metro-scale mesh networking equipment from Tropos Networks to cover 135 square miles of metropolitan Philadelphia.

Motorolas Canopy wireless broadband system will be used for the wireless backhaul.

"To effectively compete in the knowledge-based 21st century global economy, world-class cities must position themselves on the cutting edge of technology. Over the last several years, Philadelphia has strategically moved in that direction," Street said.

"Today, we are taking an important next step toward putting Philadelphia on the cutting edge of technology. The construction of a citywide wireless network will make Philadelphia more attractive as a city whether you work, live or simply visit."

EarthLink recently announced it was creating a separate municipal wireless division.

"This is a sign that the company is very serious about rolling out citywide Wi-Fi around the U.S.," wrote Esme Vos of Tuesday in his blog.

Analysts and Wi-Fi industry watchers had varying takes on the development in Philadelphia.

"This (Philadelphia) is an expensive experiment," said Doug Luce, founder and president of Telerama, an operator of for-fee hotspots in Pittsburgh, when speaking to Wi-Fi Networking News.

/zimages/4/28571.gifTo read about Wi-Fi phone options, click here.

"But cities that use tax dollars to build networks," Luce said, "ought to have a clear plan for marketing and using the network, because even commercial ventures are having trouble figuring out the best business model for operating a Wi-Fi network."

"I think that the Wi-Fi project in Philadelphia is a good thing," said longtime industry observer and consultant Joi Ito.

"I hear and understand the arguments against government running things that businesses can do, but I think that in the case of some of the low cost basic infrastructure like this, I think municipal governments can often deploy and run it just fine.

"I think that we need to start thinking of parts of our network as assets like roads, which can and should be run by government," said Ito.

EarthLink also has answered the call—along with 23 other companies, including Google—for San Franciscos announced municipal Wi-Fi project.

Citywide Wi-Fi networks have been envisioned for months—even years, in some cases—by dozens of communities across the country.

Portland, Ore., Minneapolis, and Orlando, Fla. are among those also working on similar concepts.

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Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...