EarthLink May Sell Its Municipal Wi-Fi UnitEarthLink May Sell Its Municipal Wi-Fi Unit

With municipal Wi-Fi networks fizzling across the nation, EarthLink will stop making major investments in such systems and is considering "strategic alternatives" for its municipal wireless business. That suggests that the company is open to selling the municipal unit, which is responsible for the pacesetting Wi-Fi deployment in Philadelphia and systems in other cities.

At the same time, Philadelphia City Councilman Frank Rizzo is reported to have called for a hearing to discuss difficulties with the Wi-Fi rollout. The Philadelphia Wi-Fi deployment is EarthLink's largest and, like many municipal Wi-Fi networks, has been plagued with startup problems.

EarthLink's president and CEO Rolla Huff said in a statement Friday that the firm will seek to work closely with the municipalities with which it already has operations.

"After a thorough review and analysis of our municipal wireless business," said Huff. "We have decided that making significant further investments in this business could be inconsistent with our objective of maximizing shareholder value." EarthLink estimated the value of its existing municipal wireless business portfolio at about $40 million.

While Wi-Fi has been widely hailed and successful for use by individuals and small groups, attempts to deploy it over wide areas have often been met with widespread problems, including interference and poor and uneven reception. San Francisco, another hoped-for showcase Wi-Fi deployment, also created problems for EarthLink, which abandoned the project last summer.

Philadelphia has had some success with the deployment, although the number of customers signing up for the service have not met goals. In recent weeks, EarthLink has been focusing on improving its investment in Helio, its joint venture with SK Telecom for wireless voice and data services. The two firms formed the partnership in 2005.