Will Earthlink bail on SF?

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By Tim Redmond

Earthlink, which is negotiating a contract to provide WiFi to San Francisco, may be in the process of bailing out of the deal – and whatever the mayor’s office or anyone else may say, it has little to do with the supervisors demanding more benefits.

Earthlink’s CEO announced yesterday that the company is changing its strategy on municipal wi-fi, and now wants cities to promise to buy a certain amount of service before the company puts up its system.

According to Muni Wireless magazine:

EarthLink President and CEO Rolla P. Huff today identified “a lot of inherent goodness” in the municipal wireless market but acknowledged his company’s current approach to that market is not working. To insure a return on investment, he wants “municipal government to step up and become a meaningful anchor tenant on completion of a build.”

The system Earthlink and its partner, Google, are talking about building for San Francisco will have no “anchor tenant.” The city isn’t planning to buy a certain bulk amount of wi-fi use; basic, slow service would be free to people who can get the wi-fi signal, and faster premium service would be available for a fee.

“They had discussed with us at some point the idea [of the city as an anchor tenant] and we explained that San Francisco is not at this point in a position to be interested in that service,” Sup. Aaron Peskin, who has been involved in the talks with Earthlink, told us.

So if what San Francisco has in mind isn’t what Earthlink wants to sell, is the deal dead?

Ron Vinson, the head of the city’s Dept of Telecommunication and Information Services, told that he has no reason to believe Earthlink is pulling out and “we look forward to closing a deal with them.”

But it’s looking shaky right now – and if the project goes kaput, look for Mayor Newsom to try to blame the supervisors for wanting to get the city a better deal.