Editor's Notes

EarthLink nosedives, Newsom ducks
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tredmond@sfbg.com

Isn't it just great that San Francisco was about to enter into a long-term contract to turn part of our municipal infrastructure over to a company that is laying off 40 percent of its employees, floundering around trying to find a business plan, and getting entirely out of the line of work Mayor Gavin Newsom had in mind?

I feel good that the young mayor (who is acting more and more like a little kid every day) was so careful in preparing plans for a citywide wi-fi service that he never acknowledged, up to the very end, that his public-private partnership was poorly conceived and headed for the rocks.

And now it's just so special that he wants to blame the Board of Supervisors for scrutinizing the contract — which is exactly what any decent legislative body is supposed to do at a time like this.

The EarthLink nosedive happened at the perfect time for San Francisco. If the company had hung on a little longer to its business plan for citywide wi-fi, the mayor might have managed to push enough supervisors to sign on to the deal. Or his November ballot measure might have passed, and the board might have been afraid to defy the voters. This might have been a grand little fiscal, legal, and political nightmare that could have stalled any progress on municipal broadband for years.

Newsom still insists that he was on the right track. "EarthLink would have been legally obligated to fulfill its promises to San Francisco, and we would have had a functioning wi-fi system by now," Newsom told the San Francisco Chronicle.

But the reality is, a company that doesn't want to do a job that no longer fits into its business strategy — and a company having enough financial problems that it's had to cut its staff almost in half — isn't what you would call an excellent partner. And we can all thank the fact that this Board of Supervisors is relatively independent of the Mayor's Office for our not being stuck in a rotten deal.

San Francisco doesn't have a terribly good record of negotiating public-private partnerships or development deals. Back in the early 1980s, then-mayor Dianne Feinstein personally took control of the negotiations with Pacific Gas and Electric Co. for a long-term contract to transmit the city's power. The deal was about as bad as it could get — everything for PG&E, nothing for the city — but the mayor insisted it was an excellent contract, and she and PG&E's lobbyists rammed it through a compliant Board of Supervisors. It's wound up costing San Francisco tens of millions of dollars, and the city's been trying to get out of it for years. PG&E's franchise fee is the lowest that any city charges a private utility in California — and it was assigned in perpetuity by a compliant Board of Supervisors in the 1930s.

We're supposed to be a little more sophisticated today. District elections have ended the mayoral rubber stamp at City Hall, and the mayor should understand that any time he works out a deal like this, the supes are going to give it a hard look. If it's so great for everyone, then making the details public as early as possible, working with the board (instead of refusing even to show up), and sharpening the deal will make things even better.

That's not how this mayor does business. And you can tell. *