Earthlink Sues Philadelphia After City’s|Wireless Broadband Experiment Fails

PHILADELPHIA (CN) - Earthlink sued the City of Philadelphia in Federal Court, seeking to limit its damages in a failed plan for a citywide wireless broadband Internet service, on which Earthlink has already lost $17 million.

Under the public-private project, memorialized in February 2002, Earthlink was to pay for setting up the network, expecting a "reasonable rate of return." The system was supposed to give poor Philadelphians access to broadband service.

But after spending $16.8 million, and losing $180,000 to $200,000 a month, Earthlink says it never got enough subscribers to break even.

It had less than 6,000 subscribers, though it and the city planned it would get more than 100,000, Earthlink says.

Earthlink found a nonprofit willing to take over the system on May 1, but the city and the nonprofit failed to come to terms.

Earthlink has told its subscribers the experiment is over. It seeks a declaration allowing it to remove its infrastructure from city street lights and capping its liability, if any, at $1 million.