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EarthLink’s Rethink: Build It and They Will Come?

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For cities that do it right, citywide Wi-Fi is cooler than just being able to check your e-mail while sipping a latte downtown – it could save money, save time, and maybe even save lives, when used by first responders and other public workers.

But to have a nifty wireless network, you have to build it first. Enter Atlanta-based EarthLink, which has been building and planning networks in some of the country’s biggest markets. The company’s new President and CEO Rolla Huff announced today that the company would be rethinking and likely rolling back its rollouts of Wi-Fi networks across the country.

In most cities where it’s formed partnerships with local governments, EarthLink has signed on to build a Wi-Fi network at its own cost and recoup it by selling network services. But build it and they will come isn’t turning out to be as much of a winning strategy as originally hoped, as I discussed in an article this week. And cities in all stages of the process are finding that legal, technical and financial roadblocks truly abound.

In EarthLink’s second quarter earnings call this morning, Huff told investors that “The Wi-Fi business, as currently constituted, will not provide an acceptable return,” the Atlanta Journal-Constitution reported.

EarthLink, which reported a $16.3 million loss for that period, is realizing what competitor MetroFi realized a while back – that if you’re going to bear all of the costs upfront for building a Wi-Fi network, you need a good plan for making that investment back. It might not be easy convincing cities that thought they were getting a freebie to instead commit to a bigger buy-in upfront, but that’s probably what EarthLink will have to do if it wants to keep unwiring the country.

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