EarthLink to curtail Wi-Fi investments

Internet service provider EarthLink has announced that it will reduce its investments in municipal Wi-Fi and Helio, a mobile device and service provider, but added that it won't abandon them completely.

'We are not exiting these growth initiatives,' EarthLink President and CEO Rolla Huff said during a conference call with analysts this morning. 'We're scaling back their cost structures to fit the start-ups that they in fact are.'

The announcement came a day after the company announced a major restructuring that would include laying off 900 employees ' almost half the company's work force.

EarthLink operates municipal Wi-Fi networks in Anaheim, Calif.; Corpus Christi, Texas; Milpitas, Calif; New Orleans and Philadelphia. The company is also in the process of developing Wi-Fi projects in San Francisco and Houston.

Chicago officials said yesterday they will scrap a plan to build a wireless broadband network because it will cost too much and too few residents will use it. One of the partners in the proposed project was EarthLink.

'Watching this EarthLink drama unfold is d'j' vu all over again,' said Craig Settles, president of Successful.com, a technology consulting firm. Settles had been a member of the marketing team for Metricom, now known as Ricochet, a managed-service provider that provides wireless municipal broadband. Metricom 'tried to sell to consumers a service they perceived as too slow and too expensive,' Settles said. At the same time, the company ignored the business community that would have bought the service because wireless mobile access offered a return on investment that justified Ricochet's price tag. 'Consumers are a weak play for muni wireless ' expensive to get, more expensive to keep.'

About the Author

Trudy Walsh is a senior writer for GCN.

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