Philadelphia Wi-Fi Network Hits Snags

November 20th, 2007 - 12:19 am ICT by admin  

Alfred Zaccaria was finally going to leave the world of dial-up for high-speed access to the Internet without having to pay a lot more for service.

Or so he thought.

A 63-year-old landlord in northeast Philadelphia, he signed up for EarthLink’s Wi-Fi Internet service in June for $6.95 a month, a rate that would rise to the regular price of $19.95 after six months. Five months later, he still can’t get it to work despite moving his wireless modem from room to room and closer to windows to get a better signal.

“I’m paying them and they’re not giving me the service,” said Zaccaria, who’s stuck with a one-year contract and a $70 modem whose return date has passed. “It seems unjust.”

Three years after Mayor John Street announced Philadelphia would be the first major U.S. city to have its own network for wireless Internet access, the project is nearly a year behind schedule and beset by cost overruns.

Technical problems and restructuring at EarthLink Inc., the Atlanta-based Internet service provider that won the 10-year contract to set up and manage the network, slowed the process. But its future grew much murkier Friday, with Earthlink’s announcement that it is considering “strategic alternatives” — in other words, a possible sale — for its municipal Wi-Fi business.

“Making significant further investments in this business could be inconsistent with our objective of maximizing shareholder value,” the company has decided, Chief Executive Rolla P. Huff said in a statement.

Shares of EarthLink rose by 13 cents, or 1.8 percent, to $7.27 amid heavy trading Friday, then climbed another 85 cents, or 11.7 percent, after-hours.

Earthlink, which did not disclose what other paths the unit could follow, said the division is worth about $40 million.

The company has struggled to generate revenue as its dial-up customers have turned to high-speed services. It brokered a…

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