The City of Houston has selected EarthLink to deploy a large municipal Wi-Fi network covering 600 square miles. The network will be one of the largest in the U.S. and it will primarily serve urban and suburban sections of Metropolitan Houston. Another massive Wi-Fi rollout, in Michigan, is planned to serve urban and suburban regions as well as rural sections.
In winning the Houston contract, EarthLink adds to its list of municipal customers that include Philadelphia and New Orleans. Similar Wi-Fi deals with San Francisco and Pasadena are pending.
It remains to be seen how lucrative EarthLink's networks are. The deal also calls for the service to be made available for up to 40,000 low-income residents at $10 or less a month. There will continue to be pressure to keep the service affordable, though it may be possible to develop premium services or even advertising at some point, as The Yankee Group suggests.
And while cable companies and telcos will see this as compeitition, there may be ways even they will benefit, if some amount of traffic is offloaded from their own networks, much as offloading cellular network traffic to home broadband networks can help, even if there is a danger of some revenue cannibalization.
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