EarthLink wins Philly Wi-Fi contract

Dianah Neff, Philadelphia's chief information officer, said Tuesday that the Atlanta-based Internet provider has won the contract to place Wi-Fi access points on telephone poles throughout the city, beating out a competing proposal from Hewlett-Packard. Most city residents will pay $20 a month for access.

"EarthLink will fund, build and manage the wireless network, and will provide Wireless Philadelphia with revenue-sharing fees to support our nonprofit goals of getting computers into households with training and working with our neighborhoods to do economic development," Neff told CNET News.com.

While other municipalities have created local wireless networks, Philadelphia is the largest city to date to formalize such a project. Negotiations on some remaining details--such as what percentage of subscriber fees go to the city--are scheduled to take place over the next 60 days, with a final contract signed and construction expected to begin at that time. (On Monday, San Francisco Mayor Gavin Newsom announced details of his plans for a citywide wireless network.)

The City of Brotherly Love's plans haven't exactly engendered political amity. Philadelphia has faced criticism from local telephone provider Verizon Communications and local cable operator Comcast, as well as charges of another government "boondoggle" from a city council member.

It drew a response in the form of a state law aimed at restricting municipal wireless networks--and even sparked proposed federal legislation that would effectively prohibit state and local governments from providing Internet, telecommunications or cable hookups if a private company offers a "substantially similar service."

Philadelphia's plans differ from those of many other municipalities in one crucial way: EarthLink will own the hardware and take the financial risk associated with providing the service. If it flops, city taxpayers won't lose the money.

Neff said EarthLink will operate what amounts to the Wi-Fi backbone, but multiple Internet service providers will be permitted to sell access. "We're not looking to create another monopoly," she said. "We have that in the telecom and cable fields."

"Initially, we will construct a 15-square-mile proof-of-concept area, and upon completion of the testing phase, Wireless Philadelphia and EarthLink will begin building out the remainder of the city's wireless network," Donald Berryman, executive vice president of EarthLink customer support, said in a statement. Wireless Philadelphia is a nonprofit group created by the city government.

Discounted access to low-income households is expected to be about $10. By having cheaper wireless networks available to workers such as police and building inspectors, the city hopes to save about $2 million a year over the cost of Verizon's EV-DO service, which typically runs about $70 a month.