EarthLink officially pulls plug on muni-WiFi business

Not surprisingly, EarthLink has officially pulled the plug on its muni-WiFi business. The ISP revealed in November that it was mulling an exit from the business and was actively looking for a buyer [1]. The company revealed during its fourth-quarter results that it is writing down a $20.7 million charge on discontinued operations related to the muni-WiFi assets.

"We made the decision to stop any further market rollouts and substantially reduce the cash being spent on this initiative while we search for ways to make the model viable," CEO Rolla Huff said during a conference call. "We'll continue to provide service to people currently on the networks until disposition of the assets in the various communities has been accomplished. We're actively working to determine if there are viable outside buyers for the assets or if the cities themselves are interested in the assets. We are looking to come to a solution with the municipalities that work for them and reduces our future spending obligations."

The question is: Who wants to buy these assets? EarthLink's earnings report said it lost $80 million in 2007 from municipal operations, including a $28 million impairment charge that wrote down the municipal assets' goodwill, essentially. The ISP also took an $111 million hit from Helio, its MVNO joint venture deal with SK Telecom. However, gross revenue was $1.2 billion.

For more about EarthLink's muni-WiFi business:
- read this article [2] from RCR Wireless News
- take a look at this report [3] from WNN Wi-Fi Net News

Related Articles:
EarthLink could dump Philadelphia muni-WiFi Report [4]
Earthlink may bow out of WiFi altogether Report [1]
Who would buy EarthLink's muni-WiFi business? Editorial [5]