Last stand

So EarthLink announced it was seeking “strategic alternatives” for its municipal Wi- Fi business. That issue, along with its fledgling Helio mobile virtual network operator joint venture with SK Telecom, has diminished the company’s value in the eye of its shareholders.
While the “strategic alternative” moniker is filled with all sorts of possibilities, in most cases those possibilities end with some sort of sale, usually for cents on the dollar. And in case anyone is interested in such a bargain, EarthLink was kind enough to mention that the business had a net book value of $40 million, so let the bidding begin.
(Of course, EarthLink was so happy to announce its “strategic alternatives” for its muni Wi-Fi business that it waited until 4:40 pm EST on Friday afternoon to make the announcement. And we all know that companies that are excited about news wait until the end of day on Friday to make the announcement.)
While the announcement is not the death knell for muni Wi-Fi, it’s not a great sign when one of the market’s biggest boosters admits that it can’t make a business case for the service. Other companies also have pulled back their muni Wi-Fi efforts in recent months.
However, I doubt this will stop many looking to extend the gravytrain that has become muni Wi-Fi from continuing their efforts to convince local politicians that the model is still sound and that the service will be a lasting legacy to dedicated public servants looking to “help” their constituents. Politicians are nothing if not willing to use public resources to secure their place in history.
Don’t get me wrong. I have nothing against the idea of a wireless broadband network covering a town or city, or even with those who can afford it being charged a bit more in order to subsidize access for those who can’t. But I’m not convinced, and apparantly neither is Earthlink and others, that a company having to answer to stockholders and a municipal government that has a hard enough time fixing pot holes is the right combination for such a venture.