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EarthLink Divests Municipal Wi-Fi Networks in Corpus Christi and Milpitas

5:45 am on April 21, 2008 | Category: Business, Internet, Telecom Services, Wi-Fi, Wireless Technology

Struggling dialup ISP, EarthLink Inc., backed further away from its once-ambitious citiwide Wi-Fi plans last week, as two of its partner municipalities, Corpus Christi, Texas; and Milpitas, California, agreed to take over the company’s networks in those cities.

In 2006, EarthLink started building public Wi-Fi networks in a number of U.S. cities, promising to offer wireless broadband coverage without help from taxpayers, then share subscription revenues with municipal governments. The business model began to look shaky in mid-2007, however, and new EarthLink management decided to gradually exit the Wi-Fi business.

Now that Corpus Christi and Milpitas have agreed to take control of their respective municipal networks, EarthLink owns just three citywide Wi-Fi projects â€“ in Philadelphia, New Orleans, and Anaheim, California â€“ and is negotiating the transfer of those networks. None of the cities are expected to pay EarthLink for the networks, although Corpus Christi has agreed to forfeit $1.59 million in payments owed by the ISP.

“The city will forgo EarthLink’s remaining payment and take the network back with all its assets,” said John Sendejar, acting general manager for the city’s wireless corporation. “Given the circumstances, we feel that these are good conditions to reacquire the network.”

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