Earthlink Abandons Anaheim Wi-Fi Project

Published October 10, 2008

One thousand Anaheim, California wi-fi customers will lose their municipal wi-fi service by September 30, when Internet service provider Earthlink must have all its equipment removed from the city’s property.

“Earlier this year, Earthlink approached the City of Anaheim about their desire to examine alternate business models for their privately run municipal wi-fi division in the city,” said Ruth Ruiz, a public information officer for the city of Anaheim.

“At that time Earthlink was in the process of discontinuing different wi-fi service models with other municipal partners in the country,” Ruiz continued. “Upon Earthlink’s inability to find an alternative partner to take over the Anaheim wi-fi service, Earthlink and the City of Anaheim decided to terminate our relationship.”

Additional Expenses Avoided

Technology experts say the contract’s termination is good for the city and its taxpayers. In numerous cases across the country, muni wi-fi providers left a city accountable for removing the company’s equipment from its property. That ends up costing taxpayers money even though the service wasn’t supposed to cost them a penny.

“Earthlink has had numerous problems in many markets, but I think they have learned their lesson about muni wi-fi,” said Daniel Ballon, a fellow in technology studies at the Pacific Research Institute in San Francisco. “I don’t think Earthlink wanted the program to continue.”

That’s because it turned out to be unprofitable, Ballon said. “The ability of the technology to transmit through walls, hills, and such was [limited], and in the end more towers and equipment were needed. They underestimated the equipment costs and overestimated how much money they would get from advertising the program.”

City Might Try Again

Despite Earthlink’s departure, Anaheim city officials say muni wi-fi is still a consideration for the future.

“Anaheim remains open to other privately run wi-fi models or other technologies that would provide city residents with newer and more efficient options for Internet connectivity, without any taxpayer risk, similar to the original Earthlink model,” said Ruiz.

Competition Is Key

Although muni wi-fi has not been as successful as originally thought, Ballon believes there is still a chance for success if cities and their business partners change their approach.

“It’s laudable that cities want to provide their citizens with wi-fi, but there’s a much more productive way to do it,” Ballon said. “Private companies should be allowed to come in and put their equipment up, as in the Earthlink case. The problem in Anaheim was that they locked in a single vendor with a detailed contract.

“Instead, cities should give a bunch of vendors the opportunity to build antennas and compete. After all, more competition means lower prices,” Ballon said.

Aricka Flowers ([email protected]) writes from Chicago, Illinois.