Cities that partnered with EarthLink to deploy muni wireless networks are reporting delays, opening questions of how and whether the company will honor its contractual commitments. Hints of legal action have surfaced in Houston. There may be more as frustration mounts.It is not news that EarthLink has put plans for depoying free city-wide wireless networks on hold as it reviews its future in the muni market. But cities with pending contracts with EarthLink are reporting delays, and hints of legal action are beginning to surface.
I’ve been wondering when this would happen. EarthLink does have a number of contracts pending with cities that have deadlines on their projects. Technical and legal snafus have delayed projects in a number of cities but the company’s own review of contracts it’s aleady commited to adds another wrinkle.
In a story in the Houston Chronicle, Houston Mayor Bill White said he plans “to either wrap something up within a fairly short period of time–probably a matter of weeks, not months–or proceed with our legal remedies against the company.” Curiously, the Houston deployment does include an anchor tenant agreement of the sort that EarthLink has begun seeking from its partners. (Click here to access a copy of EarthLink’s contract to build Houston’s 640 square mile, $50 million network.)
The St. Petersburg Times reports delays and growing concerns in St. Petersburg, Fl., where the city’s chief technology officer, was quoted, saying: “they’ve asked that we give them until fall, and they’ll have their game plan together.” St. Petersburg has no anchor tenant agreement with EarthLink. It accepted EarthLink’s bid in February to build a 60 square mile network for the city. At the time, EarthLink announced it planned to recover its $9.2 million investment in the project by selling upgrades to faster service and hourly and daily service to visitors.
Click here to read the St. Petersburg Times’ story.
Click here to read the Houston Chronicle story.
There’s a Dutch saying, “he who pays, decides”. Cities who have decided they don’t want to pay a cent for building out municipal wireless networks are now beginning to see what it means to lose complete control of the citywide Wi-Fi project. Granted that the Houston contract provided a minimum $500,000 payment to EarthLink for the city’s use of the network, still, the network belongs to EarthLink and the city is nothing more than a fancy anchor tenant. Oh well, that’s how it goes.
That does not mean this model is bad or that it’s always inappropriate. It’s just that too many cities copied it without thinking. Anyone who has downloaded the RFPs I have posted on Muniwireless will see how many clauses have been lifted verbatim from one RFP to another.
In late 2004 I published a document called RFP Heaven that compiled 10 RFPs. I just wanted to give people a sample of what’s out there. In the document I specifically said:
Some have followed my advice, but a lot of them have not.