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 EarthLink Ends Philly Wi-Fi By Naomi Graychase
May 13, 2008
Starting next month, no more city-wide Wi-Fi on the streets of Philadelphia. EarthLink’s Wi-Fi customers in Philadelphia received news today that their Wi-Fi service is coming to an end. The former leader in municipal Wi-Fi deployments will provide its customers with a thirty-day transition period through June 12, 2008, after which point it intends to dismantle the network and remove its equipment. The city has known for several months that EarthLink intended to leave. The Atlanta-based ISP had sought a buyer for the network, and plans were also in the works for a non-profit organization to take over management of the Wi-Fi network, valued by EarthLink at $17 million. In addition to handing over the existing network free of charge, EarthLink had reportedly also offered to make a substantial cash contribution and to donate new Wi-Fi equipment—as it did in Corpus Christi, TX—but, an agreement between the city, the non-profit, and Wireless Philadelphia was not reached in time to satisfy EarthLink’s desire to cut its losses and move on. Wireless Philadelphia has issued no comment today, but a statement on its Web site Friday said, “Wireless Philadelphia and the City of Philadelphia continue to work together to ensure a positive future for Philadelphia's municipal wireless network and nationally-recognized Digital Inclusion program, the vision of which is to provide all citizens with access to essential technological resources for education, employment, and other life opportunities.” EarthLink entered into its ten-year agreement with Wireless Philadelphia just over two years ago, in February of 2006. [Read the full text of the agreement here.] The ISP was chosen from twelve contenders and its pioneering attempt at ubiquitous, affordable Wi-Fi for a large municipality was watched closely and criticized often. The stated goals of the project were to “spur economic development,” “enhance community neighborhoods,” “help overcome the digital divide,” and to “reduce the cost of government.” Toward that end, EarthLink paid more than $2 million in pole-use fees (intended to cover a ten-year period of use), and was to begin revenue-sharing after the second year. EarthLink was also partially responsible for the electricity consumed by its equipment. In a press release issued today, Rolla Huff, Earthlink’s CEO and Chairman said, “EarthLink has worked diligently for many months to transfer our Wi-Fi network to a new owner--at no cost. 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." While the agreement between Wireless Philadelphia, the organization running the project, and EarthLink states that upon termination, EarthLink shall remove the equipment at its own expense, it seems there may be some actual or anticipated objection on the part of Wireless Philadelphia to this provision. EarthLink filed a proceeding today in U.S. District Court for the Eastern District of Pennsylvania seeking a declaration that it may remove its equipment from the city's street lights, and that EarthLink's total potential liability may not exceed $1 million. Since the agreement also specifies that neither party shall be responsible for more than $1 million dollars in damages, this also seems to indicate there may be some dispute between Wireless Philadelphia and EarthLink as to the terms of EarthLink’s departure. The agreement also states that “EarthLink shall retain title to the System and each device and component thereof.” It goes on to say, “No portion of the System shall become a fixture unless EarthLink expressly agrees otherwise in a signed paper writing...[Wireless Philadelphia] shall not gain any ownership rights in or to the System, in whole or in part…EarthLink will retain ownership of all …Equipment.” Based on this language, it seems unlikely that the courts will prevent EarthLink from removing the equipment. However, since the term of the contract was ten years, and the termination and default provisions spelled out all appear to be related to performance issues or non-payment of fees and taxes--neither of which appear to be the reason for EarthLink's departure from the project--there may yet be some measure of redress for Wireless Philadelphia. As of today, it appears that it will be up to the courts to decide. Update: Monday, May 19th, Philadelphia City Councilman At-Large, Bill Green, will speak about the "EarthLink controversy." The talk, entitled, "Why and How Philadelphia Must React to EarthLink’s Pull-out," will be held from 6-8pm at the Union League Club of Philadelphia (140 South Broad Street). More information is here: http://www.wi-fiplanet.com/news/article.php/3746311. Naomi Graychase is Managing Editor at Wi-FiPlanet.
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