Houston banked $5 million when its deal with EarthLink to build a free municipal Wi-Fi network imploded in 2007. The city's contract stipulated a $5 million penalty if the Internet service provider failed to build the 640-square-mile network. When EarthLink fled the muni Wi-Fi industry, Houston got a check, which the city is using it to bring Wi-Fi to low-income areas.

Houston IT staff identified 10 underserved communities to install free Wi-Fi access at community organizations. The payout also will fund PCs and training for users of those community agencies. "You can't even get a job today unless you get online and fill out a job application," said Janis Benton, deputy director of IT for Houston, about the benefits of providing Wi-Fi.

Community organizations receiving Wi-Fi access include literacy programs and local Boys & Girls Clubs of America facilities.

"We have one organization that works with expectant mothers who are primarily Spanish speaking -- giving them the tool sets to have healthy babies and learn English," Benton said.

EarthLink's exit didn't stall the city's Wi-Fi ambitions. Houston plans to expand the downtown Wi-Fi network it built on its own for $300,000 that enabled 750 parking meters to accept credit cards. The project paid for itself after six months.

"I've never had an ROI more quickly than I did with the parking-meter network," Benton said.

Downtown dwellers may have Wi-Fi connectivity, even without EarthLink. Since July, Benton has run a pilot using the meter-reading Wi-Fi network to give free wireless connectivity to citizens. More than 5,000 users have connected so far, Benton said. Her staff is still observing how citizens utilize the connectivity so they can find ways to make it more robust.

"We're finding that 70 percent of the use downtown is a handheld device," Benton said.

A similar network is planned for a Los Angeles district called Little Tokyo. The Little Tokyo Service Center is partnering with a vendor called Meraki Inc. to build a free Wi-Fi network in heavy traffic areas. The user interface will feature ads for nearby companies. As of press time, the service center is still discussing whether to require storeowners to help fund the network, according to Craig Settles, an Oakland, Calif.-based municipal-broadband analyst consulting on the project.

"It is more the idea that you create and foster relationships via the wireless networks," Settles said. "That's the difference between having a municipal-Wi-Fi network be really effective and just having it as a general amenity."