Philadelphia’s path-breaking citywide Wi-Fi network is running into snags and delays, according to a new Associated Press report.

The report noted that EarthLink, the builder and operator of the net, revealed last week it was considering “strategic alternatives” for its municipal Wi-Fi business, a term that often is euphemism for “selling.” The news boosted the company’s stock by 2% on heavy trading Friday. The AP story says some city councilors are getting consumer complaints of low connection speeds and poor customer service.

EarthLink declined to disclose subscriber figures, according to the AP. A spokesman reiterated the company’s position that it’s committed to completing the 135-square-mile Wi-Fi mesh, estimated to cost up to $22 million over 10 years. EarthLink was selected in 2005 by the nonprofit group, Wireless Philadelphia, to build the net, with the nonprofit handling a program to bring refurbished computers and wireless routers, and computer training to qualified low-income residents. The AP says that the group has so far signed up 400 people instead of the 1,000 initially targeted.

The company’s attempt to create a low-cost wireless alternative to wireline broadband services offered by rivals like Philadelphia-based Comcast and Verizon has bogged down. Earlier this year, EarthLink said it was re-examining the business and laid off many of the division’s employees. The AP story noted its Houston project has run into delays, and EarthLink paid a $5 million fine to the city for missing the network’s original start date.

EarthLink isn’t alone in its problems. AT&T recently told the city of St. Louis it was halting plans for a similar Wi-Fi net. Pundits such as Network World’s Johna Till Johnson see the moves as evidence that large-scale Wi-Fi deployments have a degree of complexity, both technical and economic, that advocates overlooked. 

In the AP story, Philadelphia CIO Terry Phillis says EarthLink didn’t require customers to buy or rent customer-premises equipment to improve wireless connectivity to the mesh nodes. Originally planned with an average of 20 mesh nodes per square mile, from Tropos Networks, EarthLink’s planners eventually doubled that number to improve speed and coverage.

Phillis says another issue was that EarthLink spread customer service calls among several of its existing call centers. The company now routes all Wi-Fi calls to a dedicated support staff.