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<p>San Francisco Chronicle</p>
<p><a
href="http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/08/30/MNEJRRO70.DTL">http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/08/30/MNEJRRO70.DTL</a></p>
<h1>S.F. citywide Wi-Fi plan fizzles as provider backs off</h1>
<p><a href="mailto:rselna@sfchronicle.com">Robert Selna, Chronicle
Staff Writer</a></p>
<p>Thursday, August 30, 2007</p>
<p><span> </span></p>
<p>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. </p>
<p>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. </p>
<p>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. </p>
<p>"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." </p>
<p>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. </p>
<p>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.
</p>
<p>"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. </p>
<p>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." </p>
<p>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. </p>
<p>"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." </p>
<p>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. </p>
<p>But the proposed contract stalled at the Board of Supervisors, whose
approval was needed
for the transaction to go forward. </p>
<p>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. </p>
<p>The board had expected a response to those changes from EarthLink
soon.</p>
<p>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. </p>
<p>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. </p>
<p>EarthLink's nascent municipal wireless projects in Philadelphia and
Anaheim so far
have not produced expected profits. </p>
<p>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. </p>
<p>The measure would not be legally enforceable but was designed to
rally public support for the proposal. </p>
<p>Peskin was on vacation and not available for comment Wednesday. </p>
<p>Newsom said the public response to the measure will help the city
move forward with a new plan. </p>
<p>"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. </p>
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