EarthLink scraps city-wide Wi-Fi, cuts jobs

This is a bad week for ISP EarthLink.

On Tuesday, it announced that the company would cut 900 jobs from its workforce in order to help provide a boost in cash from its operations this year. The same day, the city of Chicago announced that it had failed to reach an agreement with the company to provide city-wide Wi-Fi internet access. Following all of that, the company announced that it was pulling out of it's deal with San Francisco to provide the same service.

EarthLink, which built its business up on dial-up users, has found itself struggling to keep its subscribers from jumping ship to more affordable broadband carriers while also attracting new customers to its service. By scaling back on its workforce, the restructuring is expect to generate £67 million to £72 million in operations this year and £99 million in 2008.

Negotiations in Chicago failed after the city declined to pay to use the network to support city services. Chicago is willing to provide the infrastructure for any city-wide Wi-Fi service but any company interested would need to front its own cash to build the required network.

In San Francisco, EarthLink had been working with the city for the past three years in order to sign a contract to provide free internet access alongside search giant Google but plans had been held up by the city's Board of Supervisors. "I'm disappointed because we had a chance to get it done, and it didn't happen," said San Francisco Mayor Gavin Newsom. "The board delayed it, and now EarthLink could not be more pleased."

EarthLink still plans to spend £19.8 million to £24.8 million to finish its existing Wi-Fi connects in Philadelphia; Corpus Christi, Texas; and Anaheim, California but don't expect to hear about the company cutting deals with any more cities.

With more and more businesses offering free Wi-Fi to entice customers into their stores, is a city-wide plan really necessary? Tell us your thoughts over in the forums or in the comment section below.