EarthLink's Payout to Houston Funds Digital Divide Initiative

EarthLink paid Houston a $5 million penalty for reversing plans to build a free municipal Wi-Fi network throughout the city.

by / January 8, 2009

Houston became $5 million richer when its deal with EarthLink to build a free, 640-square-mile municipal Wi-Fi network imploded in 2007. It was one of several municipal Wi-Fi networks that floundered. The city's contract stipulated a $5 million penalty in the event the Internet service provider failed to build the network.

When EarthLink fled the municipal Wi-Fi industry, Houston got a check, which the city is using to spread Wi-Fi to low-income areas. Houston IT staff identified 10 underserved communities in which to install free Wi-Fi access at community organizations. The payout from the failed EarthLink contract also will fund PCs and training for users of those community organizations.

"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 and 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 to learn English," Benton said.

EarthLink's exit hasn't stalled the city's Wi-Fi ambitions. Houston plans to expand the downtown Wi-Fi network it built on its own dime 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 (return on investment) 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 project using the meter-reading Wi-Fi network to offer free Wi-Fi connectivity to citizens. More than 5,000 users have connected so far, said Benton. Her staff is still observing how citizens utilize the connectivity so that they can find ways to make it more robust.

"We're finding that 70 percent of the use downtown is a handheld device. It's an iPhone. It's an iPod. It's people downtown for dinner surfing the Net," Benton said.

The city has a total of 25 Wi-Fi initiatives, including water meter-reading and wireless surveillance cameras.

For Houston's future beyond those initiatives, Benton is talking WiMAX technology.


Andy Opsahl

Andy Opsahl is a former writer and features editor for Government Technology magazine.