The two jurisdictions entered into separate agreements with Earthlink that would have made the Internet accessible for anyone with a computer and a wireless card
ACCORDING TO local officials involved in the plan, Earthlink’s reneging will have few if any financial ramifications for Arlington County.
Arlington offered the Atlanta-based Internet service provider no economic incentives to operate a Wi-Fi network in the county when the two parties entered into an agreement in April of last year. Rather, Earthlink’s contract with Arlington stipulated that the company would pay the County a $40,000 annual fee for the use of public facilities.
“We didn’t invest any money in the system,” said Joe Pelton, chair of the Information Technology Advisory Commission, a citizen’s group that advises the County Board. “We actually received a fairly sizeable payment from Earthlink.”
Now that Earthlink has decided to get out of the municipal wireless business, the status of those payments is up in the air. Rob Billingsley, an administrator with the County’s Department of Information Technology, said that Arlington is currently engaged with Earthlink in private negotiations to work out a settlement on this issue.
In the meantime, Arlington County will continue to operate its free Wi-Fi hotspots at the Central Library, the Aurora Hills Library and the Courthouse Plaza. Billingsley said that the County is also looking at the possibility of adding more Wi-Fi hotspots.
But local officials said that Earthlink’s departure has effectively killed the prospect of a countywide Wi-Fi network for the immediate future.
“Naturally, we’re disappointed. We were looking forward to bring to Arlington a state of the art system,” Billingsley said. “We’ll do what we can but it won’t be like before.”
“It could have helped the County in terms of more efficient operations,” Pelton said. “It was a disappointment. But we haven’t lost anything.”
ALEXANDRIA would literally get something for nothing in the deal offered.
According to the terms of a 2006 franchise agreement between city officials and Atlanta-based Internet provider EarthLink, city taxpayers were set to receive about $13 million worth of services over an eight-year period without contributing a dime.
For simply allowing EarthLink access to the city’s infrastructure, taxpayers would receive 500 wireless accounts for government use, free Internet access for all high-school students, 2,700 half-price accounts for low-income residents, 24 free access hotspots in almost every public space in the city and cash payments depending on how many subscribers signed up for the citywide Internet access.
“We were basically getting five categories of something for nothing,” said e-government manager Craig Fifer, who helped negotiate the deal. “But that didn’t work out.”
After considering 10 different bids for providing citywide wireless service, a franchise agreement was awarded to EarthLink in late 2006. The contract was announced with much fanfare in a press release bragged about how Alexandria was poised to become the first jurisdiction in the nation to provide extensive free computers and Internet access to its secondary students.
Elated city officials said they hoped the citywide Internet service would go live as early as the summer of 2007, with individual accounts available to subscribers for about $20 a month. But none of that ever came to pass.
“EarthLink exited this business quite ungracefully,” said Alexandria Councilman Justin Wilson. “Unfortunately, this is a business that has essentially ceased to exist.”
SHORTLY AFTER THE franchise was awarded in late 2006, EarthLink began stalling — a sign that the arrangement was troubled from the start. Although similar deals had already been struck in cities such as Philadelphia and San Francisco, the financially ailing company began to dissolve its wireless division during the same period of time the service was slated to go live across Alexandria.
By August, the company announced that it was no longer willing to solely fund construction of a citywide wireless network in San Francisco, a sign that the division was in serious trouble. Shortly afterward, similar projects in Chicago and Houston were terminated.
“At that point, the writing was on the wall,” said Fifer. “Other cities that had signed on with EarthLink began losing confidence.”
In November, the company issued a terse press release announcing that it would begin “a process to consider its strategic alternatives for its municipal wireless business.”
The press release troubled Alexandria officials who had became increasingly concerned about the viability of a project that was now well behind schedule. Although the announcement did not declare an end to the company’s municipal wireless division, EarthLink President Rolla Huff clearly indicated that the company saw little benefit to pursuing a future for the service.
“After thorough review and analysis of our municipal wireless business, we have decided that making significant further investments in this business could be inconsistent with our objective of maximizing shareholder value,” said Huff in the Nov. 16 written statement.
“Accordingly, at this time, we are considering our strategic alternatives with respect to this business.”
In December, EarthLink officials formally notified the city government that the company would be walking away from the 2006 franchise agreement. City officials say that the contract is still legally binding — even now — and that a settlement has yet to materialize, with both parties negotiating terms for a final settlement. Meanwhile, Fifer said, any settlement will benefit taxpayers because the city never contributed anything to the deal in the first place.
