It's fair to say that most municipal Wi-Fi projects start out with the best intentions. Certainly there's nothing wrong with bridging the digital divide by offering wireless access to low-income residents who can't afford broadband. Or giving local emergency responders wireless freedom and connectivity so that they can have seamless communications with each other.

But, as evidenced just over the last month, "best intentions" technology projects like muni Wi-Fi often have trouble creating sustainable business models. The most recent news out of San Francisco, Houston and Chicago has not been good news for the municipal Wi-Fi movement. San Francisco's proposed wireless network, which has endured months of heated negotiations during the last year and was inching closer to rollout, was put on hold in late August when Internet service provider EarthLink, the builder of the citywide network, pulled the plug on the deal.

EarthLink had been contracted to build the citywide WLAN (wireless local area network) at no charge to San Francisco and then sell high-speed wireless access services to residents. According to EarthLink, the proposed arrangements for the wireless project, which had all the right players behind it (including Google), had become unworkable. For EarthLink, muni Wi-Fi was one way to try to offset growing revenue losses that it faced in its aging dial-up ISP business.

"We will not devote any new capital to the old muni Wi-Fi model that has us taking all of the risk by fronting all of the capital, then paying to buy our customers one by one," President and CEO Rolla Huff said on a conference call after EarthLink announced a disappointing financial forecast and 900 layoffs on August 29. The business model would have to change.

Reevaluating Wi-Fi in Chicago

Meanwhile, EarthLink's similar metro-size deals in Houston and Chicago look shaky too, due to the uneven financial burdens that both sides feel they areshouldering. Chicago CIO Hardik Bhatt said in an August 31 press release that the city was going to "reevaluate its approach" to its citywide wireless network.

"A municipal Wi-Fi network was initially envisioned as a way to provide cheaper, high-speed access to consumers. But, given the rapid pace of changing technology, in just two short years, the marketplace has altered significantly," Bhatt said. "When neither organization could justify a business case for the type of partnership outlined in our proposal, we realized - after much consideration - that we need to reevaluate our approach to provide universal and affordable access to high-speed Internet as part of the city's broader digital inclusion efforts."