Earthlink

Santa Clara electric utility takes over metro WiFi network

Lynnette Luna — Sun, 27 Jul 2008 21:56:12 -0400

While all of the cities that EarthLink and MetroFi have abandoned have declined to take over the existing WiFi network, the city of Santa Clara's electric utility said it plans to take over MetroFi's free muni-WiFi network, which was shut down last month when MetroFi essentially went of business. The utility had already planned on using the WiFi network to support a remote meter reading project. Now it also says it would take over the task of supporting and possibly expanding the free wireless network. The utility said it has contracted with a company called 180 Connect to conduct a signal strength study to enhance service in weak reception areas and upgrade equipment in those areas. Advertisements and the requirement to login to MSN will be removed.

For more:
- check out The Santa Clara Weekly

Related stories:
MetroFi shutters its service. MetroFi story
MetroFi officially pulls out of WiFi biz in Portland and other cities. WiFi story

MetroFi mulls sale and end to muni-WiFi initiatives

Mon, 19 May 2008 06:59:57 -0400

The shakeout continues in the muni-WiFi market as MetroFi indicated it is mulling a sale and ending its muni-WiFi initiatives in the nine cities where it operates WiFi networks. Like EarthLink, MetroFi is struggling to make any money on its muni-WiFi initiatives. EarthLink last week pulled out of Philadelphia, the latest in a string of pullouts.

Lucie Poulicakos, MetroFi's vice president of operations, told the Wall Street Journal the company couldn't navigate the budget restrictions of these municipal projects. Like EarthLink, MetroFi struggled with the free and low-cost Internet service aspect of the business. MetroFi's biggest project, Portland, Ore., has stalled because of financial troubles.

Poulicakos said the company has approached the cities it serves, which also include Aurora, Ill.; San Jose, Calif.; and other Silicon Valley towns, with plans to sell their networks to them or another party. If no buyers emerge, the company will shut down the networks in 30 to 60 days. Cities were notified earlier in the week, and were surprised.

MetroFi's business appeared on shaky ground a year ago, when the company said it would no longer offer free public WiFi in newly contracted cities that won't commit to minimum municipal service purchases.

She also said MetroFi, based in Mountain View, Calif., is considering options for itself, including a sale to a larger company.

For more about MetroFi's muni-WiFi struggles:
- check out this article from The Wall Street Journal (sub. req.)

How hard did EarthLink try to help its muni-WiFi customers?

Thu, 15 May 2008 06:59:58 -0400

Did EarthLink really try that hard to find suitable alternatives for those muni-WiFi networks the dial-up ISP has shut down over the past several months because it couldn't make a go of the business? That is the question being asked by a lot of folks lately.

The latest network to go dark is Philadelphia (See story No. 2). EarthLink and the city reportedly were negotiating for the city to take over the network in some way, but apparently couldn't reach an agreement; nor could EarthLink find a company to take over the network. Such has also been the case in New Orleans, where EarthLink's network is scheduled to go dark May 18. Other cities have purchased their networks outright.

It seems to most industry watchers, however, that EarthLink has been unfair in its dealings with these cities, giving them short time frames to find a buyer or shutting them out of the negotiating process altogether. For many months, the ISP left them in limbo about what its plans were in terms of the muni-WiFi network. All the while, these cities thought EarthLink would honor their contracts because of the stiff monetary penalties involved. If they would have been given definite answers early on, they could have been researching alternatives on their own for some time. Negotiating deals and alternatives are complex and time-intensive.

In Philadelphia, for instance, one of EarthLink's showcase cities for muni-WiFi, city officials said in January they thought EarthLink might pull out of Philadelphia but weren't expecting an answer for another 60 days. Officials figured EarthLink would pull the plug on the network when it heard in the news that the company would eliminate 900 workers by the end of 2007.

In the meantime, the muni-WiFi business is bouncing back in other cities where network operators are working with more sensible business models that include local government anchor tenants and/or a few other high-user tenants such as colleges and medical campuses. But it appears EarthLink has blinders on as it continually says the muni-WiFi business doesn't work. Of course everyone knows now that the general consumer muni-WiFi approach doesn't work. The company just wants out of the business.

"EarthLink's corporate culture is just about the consumer," noted Craig Settles, muni-WiFi expert and author. "It could have turned this into a business play, offering muni-WiFi as an extension of cities' wired infrastructure or it could have turned to different partners and found a better and more graceful way to turn this bump in the road into a business."

It's especially a shame for the Philly network, which has had one of the longest-running networks in the country. According to Settles, the city did one of the best jobs in terms of needs assessment and planning, it was always clear about the purpose of the network and never got on the free-broadband-for-the-masses mentality. It' main mission was to spur economic development, offer cheaper service to bridge the digital divide and reduce the cost of government. Partner Wireless Philadelphia has been aggressively moving to offer discounted services to under-served areas of the city, funded by community partners and other sources. Government users were given access too. And the network was about 80 percent complete.

Still, Wireless Philadelphia says it continues to work with the city to identify alternatives for keeping the network. Interestingly, Wireless Philadelphia says nothing in the 10-year network agreement it and the city has with EarthLink permits the ISP to unilaterally impose deadlines for the network's transfer, turn off the network or remove network equipment. Perhaps we'll see some 11th hour legal action before the network goes dark?--Lynnette

EarthLink yanks muni WiFi network in Philly

Thu, 15 May 2008 06:59:56 -0400

EarthLink has pulled the plug on its $17-million municipal WiFi network in Philadelphia after it says it failed to reach an agreement with the city to take over the network. Originally, reports claimed EarthLink would give the city until the end of this week to come up with a deal, but now the company says no deal could be reached. City officials told the Wall Street Journal that the network would cost taxpayers millions of dollars each year.

"It's been an unfortunate situation," said EarthLink CEO Rolla Huff. "It was a great idea a few years ago... but it's an idea that simply didn't make it."

Earlier this year EarthLink announced it was no longer interested in the municipal WiFi business. The Philadelphia network had reached about 80 percent of its build-out. EarthLink has already stepped away from contracts with San Francisco, Houston, New Orleans and others. The only big contract outstanding is now Anaheim, CA, according to EarthLink.- Brian Dolan

For more on EarthLink pulling the plug:
- read this WSJ report (sub. req.)

New Orleans' muni-WiFi network to go dark

Mon, 28 Apr 2008 06:59:53 -0400

EarthLink's muni-WiFi network in New Orleans will go dark on May 18 as the company--which is pulling out of all of its muni-WiFi projects--was unable to find a buyer. Unlike the networks in Milpitas, Calif. and Corpus Christi, Texas, which were transferred to those cities' governments, New Orleans didn't want to buy its network.

EarthLink said subscribers in New Orleans have been notified of the shutdown and are being offered alternate services in place of WiFi.

EarthLink still has WiFi network agreements with Philadelphia and Anaheim, Calif., and is in discussions with cities regarding the networks.

To read more about EarthLink's muni-WiFi shutdown in New Orleans:
- check out this InformationWeek article

Related articles:
EarthLink officially pulls plug on muni-WiFi business EarthLink muni-WiFi report
EarthLink could dump Philadelphia muni-WiFi Philadelphia WiFi Report
Who would buy EarthLink's muni-WiFi business? Editorial on EarthLink's muni-WiFi business

Will cable MSOs come to the rescue of Sprint/Clearwire?

Thu, 27 Mar 2008 07:59:58 -0400

How many times have we heard that cable companies are interested in broadband wireless, particularly WiMAX? But we never heard more than just vague speculation with no names. Now several publications reported this week that cable TV players Comcast, Time Warner Cable and Bright House Networks may invest in a WiMAX network joint venture being discussed by Sprint Nextel and Clearwire. That joint venture, of course, would represent the resurrection of a previous Sprint-Clearwire joint venture that ended after a few short months last year.

This may just be the opportunity cable operators can sink their teeth into given the fact that such a deal would represent a relatively modest investment vs. building their own capital-intensive networks--something investors aren't so keen about given the fact that wireless isn't a core business. The cable companies are reportedly in talks to invest as much as $1.6 billion.

Interestingly, Cox Communications won 14 A-Block licenses and eight B-Block licenses totaling about $304 million in the recent 700 MHz auction, but it's also a private company that doesn't have to answer to shareholders. Moreover, Cox, Time Warner Cable and Bright House's parent Advance/Newhouse make up SpectrumCo, the cable consortium that won licenses in the Advanced Wireless Services (AWS) spectrum in 2006. We haven't heard a word on what the consortium's plans are for the spectrum, which they paid $2.37 billion for, but the WiMAX Forum reportedly is working on creating an FDD WiMAX profile for the AWS band.

When it comes to wireless, it seems to be a confusing time for the cable industry, which has witnessed failed wireless forays from other companies whose core business isn't wireless. (Earthlink, for instance). And Pivot--the much-hailed $200 million joint venture between Sprint and cable companies Comcast, Time Warner Cable, Cox Communications and Brighthouse Networks--appears to be in trouble. The JV had aspirations to offer consumers the elusive quad-play by providing them with a combination of wireless, fixed, video and Internet services from one provider with one bill. But expansion of the service was stopped last November.

Still, the wireless spectrum cable operators do own could offer strategic complementary services such as TV delivery and total wireless/wireline broadband packages not to mention quadruple play services.

Cable operators just need to figure out how much control they want. An investment in Clearwire/Sprint would give them a wireless play they seek with less risk but also less say over services. They could develop a co-branded mobile Internet portal that will allows users to access email, search the Web and chat over the wireless broadband WiMAX connection or come to some sort of MVNO agreement.--Lynnette

P.S. Join me today as I lead a discussion about fixed mobile convergence between Kevin Kvarda, manager of engineering at T-Mobile USA and representatives from ABI Research, PicoChip, Kineto Wireless and NextPoint. Register for this free webinar taking place today at 2 PM EST and learn more about T-Mobile USA's Hotspot@Home service, as well as other ways carriers can tackle the fixed mobile convergence trend. Webinar Registration

A few still believe in the old muni-WiFi model

Mon, 17 Mar 2008 07:59:58 -0400

Last year, a relative unknown newcomer to the muni-WiFi market appeared to be the only WiFi firm left willing to foot the bill to build networks for cities. Florida-based E-Path Communications had agreed to set up two New York pilot projects back in December in Long Island and Eisenhower Park. Officials in Suffolk and Nassau counties wanted to cover 750 square miles with a muni-WiFi network that their governments didn't have to pay for. E-Path had planned to build the network with its own money and sell services back to the city to recoup its investment.

At the time, I asked whether E-Path knew something larger players such as EarthLink and MetroFi didn't. Both of those firms have said to receive a viable return on investment, municipal governments needed to step up and become meaningful anchor tenants before construction.

Not surprisingly, E-Path has done none of the work since it can't seem to find anchor tenants or advertisers, according to Long Island BusinessNews. Trenton, N.J. is in the same boat since E-Path won a similar deal there in November. The mayor asked the city council at a meeting on March 6 for $250,000 to help E-Path start the build-out.

You have to wonder, were these city officials paying attention to the turmoil in the muni-WiFi business when they granted their contracts to E-Path, which had no track record building muni-WiFi networks? Why did they believe things would be different for them? Amazingly, Suffolk County still believes E-Path will execute its agreement even though the company has no money and can't seem to attract partners because it doesn't have a solid business case.--Lynnette

Houston issues RFI for muni-WiFi

Thu, 28 Feb 2008 06:59:54 -0500

Using its $5 million it received as a penalty payment from EarthLink for dropping the city, the city of Houston is looking to re-launch its muni-WiFi initiative, issuing a request for information to review proposals for a new project.

The RFI is looking for information about approaches for providing network operational support for a mixed-use muni WiFi network, hotspot network services in high traffic areas of the city and ISP and open access wholesale management.

For more about Houston's WiFi plans:
- read this article from MuniWireless

Related articles:
EarthLink not responsive in Houston with WiFi Report
Houston not wavering on WiFi plans Report
EarthLink officially pulls the plug on muni-WiFi business Report

Covad's experiment with muni-WiFi comes at right time

Mon, 25 Feb 2008 06:59:58 -0500

With EarthLink dropping out of the muni-WiFi market and plans imploding across the country, you have to wonder why broadband operator Covad has any interest at all in muni-WiFi. But the company, which wants to extend the reach of its fixed-line broadband services to hard-to-reach areas, has agreed to test a network in San Carlos, Calif., as part of the struggling Silicon Valley Network, that ambitious WiFi initiative that aims to blanket 1,500 sq. miles with WiFi. (See story No. 1)

In reality, this might be the right time for Covad to become involved with muni-WiFi as it's becoming clear what business cases are successful. Clearly, free WiFi is not the optimal business model, but one of a mixed-use that involves the government as an anchor tenant and offering service to the public. Enough failures have shown what works and what doesn't in terms of a business model.

The other WiFi business model that is emerging--and one Covad might be most interested in--is one centered on regional wireless networks in rural areas where broadband access is sparse. The state of Vermont, for instance, aims to have 100 percent broadband coverage in the state by 2010 by helping fund wireless ISPs throughout the state. That type of model, of course, is what Silicon Valley Network aims to do in California.--Lynnette

Where does EarthLink go from here?

Mon, 11 Feb 2008 06:59:58 -0500

Last year in July I questioned whether EarthLink would become a model of success in the muni-WiFi and MVNO market or an example of a company that took too many risks. It appears the latter has happened.

Wireless was supposed to represent a new frontier for EarthLink, which was looking for ways to offset its dramatically declining dial-up customer base. It was EarthLink's former CEO Gary Betty who had the original passion and vision to see the new businesses through, but he died in January 2007. Current CEO Rolla Huff came in and cleaned house.

It's not that anyone could blame him. The company was losing money from these initiatives. EarthLink's most recent 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. The ISP also took an $111 million hit from Helio, its MVNO joint venture deal with SK Telecom. It would have taken significant time for EarthLink to find the right business model for muni-WiFi, and a company whose core business isn't wireless doesn't have the time nor the funds to experiment.

But where does EarthLink go from here? Virtually all of EarthLink's businesses aren't faring well. Dial-up customers continue to decline and its broadband business is struggling. Despite losing $54.8 million in 2007 and experiencing a drop in customers by 27 percent, Huff was able to show Wall Street some progress in the fourth quarter: operating income of $22.6 million compared with a loss of nearly $18 million the previous year. And after repurchasing 10.1 million shares of its own stock, it is forecasting "record income from continuing operations" for 2008.

Huff may be able to keep Wall Street happy with all of his cost cutting in the short term, but he still must address the fact that his company's core business is floundering. Will the company look for another wireless opportunity to grow or simply become a small regional version of itself?--Lynnette