Earthlink: We're Getting Out of Muni Wi-Fi Biz

That's about it for Earthlink's grand plans to (un)wire America's cities with wireless computer data networks accessible from anywhere in town. While Earthlink once planned and/or contracted to set up public Wi-Fi networks in roughly a dozen cities, none of those have come completely to fruition, and most have now been abandoned altogether.

The final nail in the coffin: Earthlink is now looking for someone to buy its muni Wi-Fi business wholesale. But since it's a major money loser for the company, I can't imagine who'd want to buy it.

Earthlink has consistently lost money since it began attempting to build municipal Wi-Fi networks in 2005. In the last three months, that Wi-Fi business lost $32.1 million alone, vs. revenue of just $22.6 million for the entire company. Ouch.

Whether or not a buyer for the muni Wi-Fi business emerges, Earthlink has given up on turning a profit in it itself... and any buyer may be in for the same scenario. In an interview with Ars Technica, one analyst noted that anyone looking for profits in this mini-industry is "in for trouble."

And that's exactly the problem. There's just not much of a business model in muni Wi-Fi networks. My friend Don Willmott explains the issue in depth in this insightful feature story, noting that there are plenty of alternatives (think: Starbucks) for people jonesing for a Wi-Fi fix in most major cities.

Also, high-speed, 3G and 4G cellular networks are well on their way, and these work about as well as Wi-Fi does for most users and offer vastly better coverage with less equipment.

The fact that no one can quite figure out how to make money by giving away free Internet access while maintaining a vast and complicated network of hardware components is almost beside the point.

LINK: EarthLink hangs "for sale" sign on municipal WiFi business