Earthlink restructuring includes new model for municipal Wi-Fi

Atlanta-based Earthlink’s restructuring, announced Tuesday, will include a new approach to its troubled municipal Wi-Fi business, says Earthlink President and CEO Rolla Huff. The restructuring, and its implications for municipal Wi-Fi, will be topics of discussion at a Washington-based Public Technology Institute (PTI) summit next month.

Earthlink plans to eliminate 900 jobs and close its offices in San Francisco; Orlando, Fla.; Knoxville, Tenn.; and Harrisburg, Pa. In a teleconference Wednesday morning, Huff said the company was incurring too many costs on its municipal Wi-Fi business, but he believed there was still a great interest in seeing Wi-Fi continue, albeit with broader sharing of costs. Therefore, the company will continue to scale existing customers’ networks if they can reach a scale that covers Earthlink’s operating costs. “But, we will not devote any new capital to the old municipal Wi-Fi model that has us taking all of the risks by fronting all of the capital and then paying to buy our customers one by one,” Huff said. “In my judgment, that model is simply unworkable.” Instead, the company will only deploy new networks under a model that ensures a return on investment for the company’s shareholders.

PTI Executive Director Alan Shark expressed disappointment about Earthlink’s reorganization. “This is an unfortunate situation, and a dark cloud has been cast over the muni wireless community,” Shark says. “We need to band together and collectively find a solution for local governments.”

PTI is presenting a Muni-Wireless Applications Summit Sept. 19 to 21 in Corpus Christi, Texas, that will discuss options for using wireless infrastructure for public services. More information about the summit is available at www.pti.org.