EarthLink's once-bold plans to build out municipal wireless networks is on hold as new CEO Rolla Huff said the old business model simply doesn't work.
"Until we're confident that we can build new networks and get an acceptable return, we will delay any further new buildouts," Huff said on a conference call following EarthLink's second-quarter earnings report. The company lost $16.3 million in the quarter, which ended June 30.The immediate impact is being felt in San Francisco, where EarthLink was slated to built a much-touted WiFi network. Board of Supervisors President Aaron Peskin moved to push back votes on the network until September.
Peskin said late Monday he plans to move a vote by the board's Budget and Finance Committee to Sept. 12. That committee vote, on whether to send the plan on to the full board, had been set for Wednesday after several earlier delays. Meanwhile, the full board had been set to vote Tuesday on whether the project should continue to be exempt from an environmental impact report. Its vote, also postponed several times, would be pushed back to Sept. 11.Under Huff's new model, EarthLink will ask cities to sign up as anchor tenants, which means they will buy service for their own operations. Peskin said San Francisco isn't ready for that. The city doesn't have enough equipment to make use of the services it would be buying.
"We still have people filling out paper in the police department," Peskin said. "Someday we'll get there, and the city could be a user, but it's not, at this point, the best use of our money."