EarthLink Says No More Money for Existing Muni Networks

[David Farber <dfarber () cs cmu edu>]

Begin forwarded message:

From: dewayne () warpspeed com (Dewayne Hendricks)
Date: November 17, 2007 4:19:04 PM EST
To: Dewayne-Net Technology List <xyzzy () warpspeed com>
Subject: [Dewayne-Net] EarthLink Says No More Money for Existing Muni  
Networks

[Note:  This item comes from reader Ken DiPietro.  DLH]

November 16, 2007
EarthLink Says No More Money for Existing Muni Networks

By Glenn Fleishman
<http://wifinetnews.com/archives/008052.html>

EarthLink drops another bombshell: They hired Rolla Huff to sort out  
their future business, and his message from the start was steely eye,  
bottom line, get things on track for the future in an industry in  
turmoil. Then Huff cuts a huge percentage of the staff, lays off the  
municipal network head, and says no more investment in new networks  
without a change in model. Now the final piece is in place: No more  
“significant investments” for existing networks without some  
alternative model being in place, which isn’t specified in the press  
release.

Many wondered if this were coming when the layoffs were announced.  
EarthLink was reassuring that it would continue to work on and finish  
projects it was committed to. But now, not so much. Philadelphia at  
last check was 65 percent complete. Update: The Associated Press has  
more detail (some of it added late in the day in an updated filing),  
including a statement from Philadelphia’s current CIO who says  
EarthLink will complete the network—EarthLink also confirmed this—but  
has no commitment now to operate it. “Philadelphia could take the  
network over and find another company to operate it,” the AP writes,  
which was precisely the worst-case scenario for public ownership that  
its detractors originally stated. (Although in this form, the city  
will be getting the infrastructure at perhaps zero cost.)

Other cities like Anaheim, New Orleans, and Corpus Christi were in  
various stages of completion or upgrade. The release values the muni  
business at $40m. That’s useful to know when they shut it down  
entirely and write off the value. I expect there may be a company or  
two willing to buy the networks on the cheap if the engineering  
conforms to the buyers’ expectations.

[snip]

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