Philadelphia, EarthLink finalize wireless deal

updated 1:37 p.m. ET Jan. 30, 2006

PHILADELPHIA - EarthLinkInc. has finalized a 10-year contract to provide wireless Internet service across Philadelphia, a city official said Monday.

Philadelphia was the first large city to announce plans to build a wireless Internet network and provide low-cost access to residents as a way to span the digital divide. Smaller cities already have networks in operation.

In Philadelphia, EarthLink will own the network and charge a wholesale rate of $9 a month to Internet service providers that would then resell access to the public, according to Dianah Neff, the city’s chief information officer.

The contract doesn’t specify the monthly rate that would be charged to consumers, but Neff said the wholesale price is low enough to enable ISPs to offer low-cost services. City officials had been trying to keep the monthly price to $20 or less.

The contract will go before the City Council for approval in February. Construction should start right after the contract is signed. EarthLink will build the network initially over a 15-square-mile area in Northeast Philadelphia to prove the system will work, Neff said. If successful, citywide access could be turned on by spring 2007.

Under the terms of the agreement, which can be renewed, Atlanta-based EarthLink will carry the cost to build the Wi-Fi network to cover 135 square miles.

EarthLink also will pay the city and Wireless Philadelphia, the nonprofit handling the project, a fee to mount equipment on city infrastructure, such as lamp posts.

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