News

EarthLink Courts Controversy With Muni Franchise Offer to ISPs

The company told ISPCON attendees that there are so many business opportunities out there, it wants to offer franchises to WISPs in markets it's not pursuing itself.

by Alex Goldman ISP-Planet Managing Editor [May 26, 2006]

On the first day of ISPCON, Bill Topeglian, vice president of corporate development for Atlanta-based EarthLink and Raghu Rau, senior vice president of global marketing and strategy for Motorola Networks (the ISP services arm of Schuamburg, Ill.-based Motorola), showcased the EarthLink architecture for municipal deployments.

When EarthLink first entered this market (see Winning Municipal Business) the company was somewhat bemused by the filing requirements for public contracts. At the time, Cole Reinwand, EarthLink's director of next generation broadband, told us that the biggest paperwork challenge for the Philadelphia contract was adhering to filing guidelines without disclosing the trade secrets of partners Tropos and Motorola.

Now EarthLink has what it believes is a proven architecture, but we believe the concept will be proved only when the Philadelphia network is up and running.

Topeglian said that there are about 750 major cities in the U.S., with 31 million households, covering an area of 17,000 square miles, that are ripe for municipal wireless.

"EarthLink doesn't have the resources to do this deployment and could not do it in an aggressive time frame," he said. "We need partners to build the infrastructure, own it, and allow roaming."

An agreement
In exchange for the roaming agreement and other unspecified conditions, EarthLink will share the architecture, offer its volume pricing for equipment and services, and, if the WISP wishes, share EarthLink products and its support infrastructure.

In addition, EarthLink would like a Right of First Refusal (ROFR) in the event the WISP decides to sell its network. This worried several attendees, and during the Q&A session, Topeglian agreed that the ROFR was not key to the deal.

Topeglian wanted ISPs to understand that EarthLink is a source of knowledge and connections, but not cash. "We're not a financing arm (although we can make it easier). We do not loan you money to build your network. We do not tell you how to run your business, or when to sell it."

In the Q&A session John Scrivner, president and co-founder of Mt. Vernon Net (based in Mt. Vernon, Ill.), pointed out that he already had a wireless network and did not want to share revenue from it.

"There's no revenue share," Topeglian said. "If you have your own network, the hardware might not match. EarthLink is most comfortable with a Motorola-based network."

Gerg Boehnlein, vice president of Cleveland, Ohio-based N2Net asked about interference and whether EarthLink would compete with existing WISPs.

In response to the possibility of interference, Topeglian said that although there is in theory a limit to the number of radios that can be supported per square mile, "we're not at that limit."

In addition, the company uses only one of three channels, with no hopping, he claimed.

Lisa Bickford, now CTO of Bethesda, Md.-based MobilePro, asked where the ROI was on a free network. Topeglian claimed that the architecture will not require upgrades, not use WiMAX, and so after the initial expenditure there are relatively few ongoing costs.

The next EarthLink rollup
EarthLink has been buying dialup customers for some time. It now seems ready to create its own wireless rollup opportunity. Topeglian comes from OneMain, which, Topeglian reminded attendees, acquired 24 ISPs.

In retrospect, Topeglian said, OneMain's error was switching happy customers off local brands to a national brand. "EarthLink will not make that same mistake again," he vowed, promising to preserve the brand name of any acquired WISPs.

Opportunities in the big cities
In the major cities, where EarthLink intends to builds its own infrastructure, the company is working with local ISPs to get their brand on the EarthLink infrastructure, Topeglian claimed.

Conclusion
WISP owners we talked to at ISPCON seemed intrigued by the program, eager to learn more details, but were skeptical. In many areas, there's more than one WISP. EarthLink will need to manage its relationships skillfully to avoid being drawn into local turf wars over territory and spectrum.

Nevertheless, it is a fascinating idea, and we do not yet have all the details. The entire ISP community looks forward to learning more.

—End