Wireless project over budget

The firm Philadelphia has retained to build a citywide wireless Internet network has spent millions more than its anticipated costs and cannot say when it will complete the project, City Council members were told yesterday.

In fact, EarthLink Inc. representatives didn't show up for a committee hearing on Wireless Philadelphia. The company's retreat from the municipal-wireless business prompted the hearing. But EarthLink made clear by its absence that it did not want to be peppered with questions in public as it rethinks its business strategy.

"While we are sensitive to the city's concern about the future of the project, we are not able to provide complete answers because of confidentiality agreements with other providers that may have an interest in this network and our status as a publicly traded company," the company said in an unsigned statement submitted to the Committee on Technology and Information Services.

EarthLink said it had spent more than $20 million to establish the broadband wireless service, "in excess of the $12 million to $15 million anticipated by the city and EarthLink at the outset of the project."

The network is substantially built, the company said, but neither EarthLink nor city officials could provide a date for when the system would be completed.

Greg Goldman, CEO of the city-created nonprofit Wireless Philadelphia, said EarthLink's network had "several thousand" subscribers so far.

Councilman Frank Rizzo, who said he had received numerous complaints about the service, ridiculed that figure in comparison to the investment cost, adding that he now understood why the company was reassessing its municipal-wireless effort.

The purpose of the city network has been misunderstood as one designed primarily for the public, said Craig Settles, a municipal-wireless consultant and author of a 2006 book about the Philadelphia network.

The network was designed to help bridge the "digital divide" and provide more Internet access to the poor, Settles said in an interview. It also was viewed as a way to make government more efficient by increasing WiFi access for mobile workers, such as police, social workers and building inspectors, he said.

EarthLink gave Wireless Philadelphia $1 million to help market discounted and free WiFi service for the poor. Goldman said the "Digital Inclusion" program had had 613 sign-ups by June, short of its goal of 1,000.

In its deal with the city, EarthLink agreed to pay for building the network. In exchange, it could charge customers such as Drexel University for access to the network.

But EarthLink unsuccessfully tried to use Philadelphia as a marketing tool to sell networks to other cities, Settles said. The company is now reevaluating what to do in the that arena.

"I do expect them to finish building the network," Settles said.

The network could become a valuable resource for boosting low-income Internet access, economic development, and government efficiency, Settles said.

City Solicitor Romulo L. Diaz Jr. said at the hearing that the city was contractually protected if EarthLink wanted to bail out.

In the meantime, he said, the city will "continue to hold their feet to the fire."