The Nutter administration announced yesterday that the city would buy for $2 million the much-hyped but underperforming municipal WiFi network built by Earthlink and more recently owned by the local Network Acquisition Co.
Although free Internet access will still be available to the public in some areas, the city intends to use the network principally for official business, such as expanding its web of surveillance cameras and giving city workers the ability to file reports and access data from the field.
The network will require significant additional investment to handle that kind of traffic: $17 million between fiscal 2011 and 2015, the administration predicted.
But the cost of building that kind of broadband citywide wireless network would be far higher, $30 million or more, and take many more years to construct if the city had to start from scratch, said the city's chief technology officer, Allan Frank.
"We're effectively getting a lot of valuable equipment in a fire sale. This was a no-brainer. It's worth more than $2 million even as scrap," Frank said.
Five years ago, before the network was built, Mayor John F. Street attracted international attention with his goal of making Philadelphia the world's largest hot spot. Earthlink was selected to build the network, but even after that firm invested $17 million, service was spotty in large sections of the city and virtually nonexistent inside buildings.
Earthlink topped out at about 6,000 paying customers, and in June 2008 the struggling Internet service provider pulled the plug on its experiment with municipal WiFi in Philadelphia.
At the time, Mayor Nutter spurned deals that would have let the city take the network over. But Frank, who was not yet working for the city, said it was clear to him after reviewing the city's technological needs that a municipal wireless network would be a huge boon.
"We just may be in a different place now. To me this is making lemonade out of lemons," Frank said.
Derek Pew, one of the founders of Network Acquisition, said he and his partners had viewed themselves as little more than custodians of the network, who would keep it running until the city or a larger firm bought it. No private buyers emerged.
The $2 million that NAC will get from the city is the same sum the firm paid Earthlink to acquire the network. To city plans to use $1.5 million in federal homeland security grants and $500,000 from the public-safety capital budget. City Council approval will be required.