August 8th, 2007
Newsome takes SF Wi-Fi plans to the voters
With the city’s Wi-Fi initiative seemingly stuck, San Francisco Mayor Gavin Newsom is trying to turn up the heat by putting the proposal for an ad-based free Wi-Fi network to the voters, the Associated Press reports.
The measure is nonbinding so passage wouldn’t oblige the government to build the network but Newsome is betting that it would provide enough pressure to force the City Council to move forward. The Council is meeting in September.
The agreement, which could run for as long as 16 years, currently calls for EarthLink Inc. to build the Wi-Fi system for an estimated $14 million to $17 million. EarthLink hopes to recoup its costs by charging about $20 per month for Internet access that would be three to four times faster than the free, ad-supported service.
Meanwhile, Earthlink is having second thoughts as new CEO Rolla Huff has decided that the existing Wi-Fi business model is not profitable for the ISP.
“Until we’re confident that we can build new networks and get an acceptable return, we will delay any further new buildouts,” Huff said on a conference call following EarthLink’s second-quarter earnings report. The company lost $16.3 million in the quarter, which ended June 30.
