EarthLink on Tuesday threw in the towel on its Philadelphia Wi-Fi project, which the ISP was trying to transfer to a non-profit or the city's operating group. Now EarthLink is trying to pull out its gear.
EarthLink says in a statement:
After months of negotiations with the City of Philadelphia and a non-profit organization in which EarthLink offered to transfer to either the City or to the non-profit -- for free -- the entire $17 million Wi-Fi network, as well as pay cash and donate new Wi-Fi equipment, the transfer unraveled due to unresolved issues among the City, Wireless Philadelphia and the non-profit.
"EarthLink has worked diligently for many months to transfer our Wi-Fi network to a new owner -- at no cost," said Rolla Huff, EarthLink's chairman and chief executive officer. "Unfortunately, our hope that we could transfer our network to a non-profit organization that had planned to offer free Wi-Fi throughout Philadelphia will not be realized. Since we have exhausted our efforts to find a new owner of the network, our only responsible alternative now is to remove our network at our cost and assist our Wi-Fi customers with alternative ways to access the Internet."
Meanwhile, EarthLink is trying to cap its liability at $1 million. What's going on? EarthLink has been exiting its municipal Wi-Fi business as it cuts costs
. It looks like EarthLink wanted to donate the network to save on labor. It's much easier to walk away from a network than rip it out. Apparently, Philly didn't want it because it would take taxpayer funds to run the network and the gear may be outdated. News.com's Maggie Reardon has the gory details
Paragraph of the day goes to Glenn Fleishman at Wi-Fi Networking News. Here's how Fleishman described the EarthLink exit strategy:
I’ll say bluntly: If someone offered you $17m of outdated equipment on a network that never worked to specification that wasn’t completed, and that already had known high annual costs, and which a private firm gave up as a bad job that they couldn’t turn a dime on—would you take that deal? No. EarthLink will ultimately have to pay much more than $1m, I predict, and I suspect some of the settlement will leave gear in selected neighborhoods behind for more modest networking purposes. It’s not going to be as easy as releasing a press release.
On May 7, Greg Goldman, CEO of Wireless Philadelphia, wrote:
Philadelphia's Wi-Fi network continues to operate in the roughly 80% of the City in which it has been deployed. Nothing in the ten-year Network Agreement permits EarthLink to unilaterally imposedeadlines for the network's transfer, turn off the network or remove network equipment.
It has been well publicized that EarthLink recently announced its intention to sell its Wi-Fi networks and exit the municipal wireless business. Wireless Philadelphia and the City of Philadelphia continue to work together to explore options for the network's future. In the meantime, we are committed to our core mission of serving Digital Inclusion customers with internet access, hardware, technical support and training.
Sounds like a mess to me.