EarthLink drops out of SF muni-WiFi deal

EarthLink's CEO Rolla Huff, who took the helm of the company in late June, told San Francisco's mayor Gavin Newsom that EarthLink was "not going to be able to fulfill their end of the bargain" for a municipal wireless deployment. The news comes just one day after Huff announced 900 jobs will be cut and multiple offices closed across the country. Huff, however, asserted on a call with analysts late in the day yesterday that EarthLink was committed to its wireless businesses, including muni-WiFi and its MVNO Helio.

"Our core business has been diluted by new-business initiatives that were begun with good intentions but morphed into larger commitments," said Huff. "We are not exiting these growth initiatives; we're scaling back their cost structures to fit the startups that they in fact are."

That said, Huff noted, "We will not devote any new capital to the old model for muni-WiFi that has us taking all the risk. That model is simply unworkable."

Chicago announced yesterday that it was shelving its plans for a muni-WiFi network, which originally was to be built by EarthLink.

For more on EarthLink's decision to back out of SF:

- read this article from InformationWeek
- check out this article from the San Jose Mercury News