EarthLink exits deal to offer free Wi-Fi in San Francisco

Financially struggling EarthLink Inc. on Wednesday bowed out of a deal to join Google Inc. in providing free wireless Internet access throughout San Francisco, according to the mayor’s office.

EarthLink Chief Executive Rolla Huff told Mayor Gavin Newsom during a phone call that “they were not going to be able to fulfill their end of the bargain,” said Nathan Ballard, Newsom’s spokesman. “Mr. Huff made it clear it wasn’t going to happen with EarthLink; they are getting out of the Wi-Fi business.”

Huff delivered the news a day after he announced that the Atlanta-based Internet service provider planned to cut costs by eliminating 900 jobs -- nearly half its workforce -- and closing its offices in four cities, including San Francisco.

EarthLink and Google beat out five other contractors that bid last year on a deal to create a citywide wireless network in San Francisco. Like Philadelphia, Chicago and several other cities, San Francisco has been competing to become the first large U.S. city to make the Internet available throughout the metropolitan area.

Under the four-year agreement, EarthLink was supposed to bear an estimated cost of as much as $17 million to build and maintain the Wi-Fi system.

Mountain View, Calif.-based Google planned to sell ads to help subsidize the free service, while EarthLink planned to recoup its investment by charging $21.95 a month for a premium Wi-Fi service that would allow subscribers to surf the Web at speeds three to four times faster than with the free service.

EarthLink spokesman Jerry Grasso confirmed that Huff spoke with Newsom but said he couldn’t comment on what was discussed.

Google executives could not be reached for comment.