[RTC List] SF citywide Wi-Fi plan fizzles as provider backs off

[Sean McLaughlin]

San Francisco Chronicle

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/08/30/MNEJRRO70.DTL


  S.F. citywide Wi-Fi plan fizzles as provider backs off

Robert Selna, Chronicle Staff Writer <mailto:rselna at sfchronicle.com>

Thursday, August 30, 2007

 

Mayor Gavin Newsom's high-profile effort to blanket San Francisco with a 
free wireless Internet network died Wednesday when provider EarthLink 
backed out of a proposed contract with the city.

The contract, which was three years in the making, had run into snags 
with the Board of Supervisors, but ultimately it was undone when 
Atlanta-based EarthLink announced Tuesday that it no longer believed 
providing citywide Wi-Fi was economically viable for the company.

Newsom blamed the Board of Supervisors for not acting quickly enough to 
approve the contract that he said was the best deal any big city had 
negotiated.

"I'm disappointed because we had a chance to get it done, and it didn't 
happen," Newsom said. "The board delayed it, and now EarthLink could not 
be more pleased."

Newsom said he did not see any benefit in the deal collapsing even 
though EarthLink appears to be in financial straits and has an uncertain 
future.

The company announced Tuesday that it will slash 900 jobs - about half 
its workforce - and close offices in San Francisco and several other 
cities as a result of stiff competition from other Internet service 
providers.

"EarthLink would have been legally obligated to fulfill its promises to 
San Francisco, and we would have had a functioning Wi-Fi system by now," 
Newsom said.

EarthLink spokesman Jerry Grasso said that EarthLink was willing to work 
with San Francisco but had decide d that it "was not willing to work in 
the business model where EarthLink fronts all the money to build, own 
and operate the network."

Supervisor Ross Mirkarimi said that Newsom should be "relieved" that the 
contract was not finalized and defended the board, saying that it had 
saved the city from being stuck with a questionable network and company.

"The mayor should be extremely thankful that the board was so 
investigative and thorough in its review," Mirkarimi said. "EarthLink's 
meltdown confirms our concerns that the risks outweighed the benefits."

In January, the city agreed to a deal in which EarthLink would have paid 
the city $2 million for the right to build, install and run a free Wi-Fi 
network and to partner with Google to provide Internet service. People 
could have paid $20 per month for a faster connection.

But the proposed contract stalled at the Board of Supervisors, whose 
approval was needed for the transaction to go forward.

Board of Supervisors President Aaron Peskin proposed changes to the 
contract that would have increased the minimum connection speed of the 
free service, require additional privacy protections and reduce the 
duration of the contract from 16 to eight years.

The board had expected a response to those changes from EarthLink soon.

The city started negotiating the Wi-Fi agreement when EarthLink was 
under the leadership of Chief Executive Garry Betty. Betty, who died 
earlier this year after a battle with cancer, saw municipal Wi-Fi as a 
way to free EarthLink from the cost of using other companies' networks.

Rolla Huff, who became the company's CEO in June, said in recent months 
that the company was re-evaluating its approach to providing Wi-Fi in 
cities because the practice was not providing an acceptable rate of return.

EarthLink's nascent municipal wireless projects in Philadelphia and 
Anaheim so far have not produced expected profits.

On Aug. 3, Newsom and Peskin jointly submitted a last-minute ballot 
measure for the November election that would allow voters to say whether 
they support establishing free, wireless Internet access in San Francisco.

The measure would not be legally enforceable but was designed to rally 
public support for the proposal.

Peskin was on vacation and not available for comment Wednesday.

Newsom said the public response to the measure will help the city move 
forward with a new plan.

"We think a public-private partnership is the way to go, but we're 
looking at new ways to do it. ... We will benefit from the lessons we've 
learned so far and from what other cities are doing," Newsom said.

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