Chicago Scraps Muni Wireless; Houston’s Plans Also on Hold

Published October 1, 2007

In late August the City of Chicago pulled the plug on plans to build a citywide municipal wireless system after failing to come to terms with prospective partner EarthLink.

Chicago is the largest city so far to scrap its plans in the face of new demands from commercial partners to act as “anchor tenant” and commit to purchase a certain level of wireless data services each year.

In addition to disagreement over the city’s role as anchor tenant, a number of other factors influenced the decision, including the wider availability of affordable wired and wireless Internet connections, some provided by the city itself through other departments.

For example, free wireless Internet is available in all 79 city public libraries as well as in large downtown public spaces such as the city’s Millennium Park and Daley Plaza.

Houston Plan Hits Snag

Meanwhile, the Houston Chronicle in August reported EarthLink has delayed the start of construction of a municipal wireless system there, which up to now had been the largest to reach the contract stage.

As part of the deal, the city agreed to pay EarthLink $2.5 million during the next five years to serve as the anchor tenant.

At the time the deal was signed earlier this year, the project was expected to require an investment of about $50 million, according to EarthLink and city officials. In recent months, EarthLink said it has been reviewing its private-public partnership model and has stopped bidding on projects until officials are confident the company will get its money’s worth.

Steven Titch ([email protected]) is senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News.