Municipal Wi-Fi: A Failure To Communicate

The first rule for promoting a new technology is to make sure it works. So it's a surprise when a four-person team from EarthLink Inc. (ELNK ) tells me that the wireless broadband service the company is rolling out for the city of Anaheim, Calif., won't work in a coffee shop there. This is the same Starbucks (SBUX ) where the EarthLink folks had just spent an hour pitching their Feather service. "The walls are too thick," explained Cole Reinwand, vice-president of products strategy and marketing.

In fact, thick walls are only one of the hurdles EarthLink needs to lick before it can deliver Wi-Fi to cities that are clamoring for cheaper broadband Internet service. With 13 cities under contract and systems in various stages of operation in Anaheim, Philadelphia, and New Orleans, among others, EarthLink is the early leader among municipal Wi-Fi providers. But EarthLink and other providers have struggled with low subscriber response and reliability problems, and entrenched telecom and cable giants are fighting back with alternative technologies. The question is whether municipal Wi-Fi will ever pay off, or if this grand plan to offer broadband to the masses is headed for the dustbin of history.