EarthLink Responds

EarthLink responds vigorously to our editorial, which said the company was in trouble.

[Response to Editorial: Don't Be Like EarthLink from October 4, 2007.]

[October 4, 2007]

First, EarthLink takes exception at Ms. Kuchinskas' definition of Mr. Wetzel as our CEO's 'crony'. Joe Wetzel is well-respected telecommunications executive with years of voice and data experience with companies such as Mpower, AT&T Broadband, MediaOne and USWEST. His leadership and operational knowledge are key assets to EarthLink as the company refocuses on its next phase of growth.

EarthLink believes that there is a future for municipal wireless (Muni Wi-Fi networks). We will continue to operate our existing municipal wireless networks in cities such as Philadelphia. We have five 'live' at this time. Three completed: Milpitas, CA; Corpus Christi, TX and New Orleans, LA. Two more being built out, but are up and running at this time during completion: Anaheim, CA and Philly.

In other markets, we are approaching city officials to discuss needed changes in our business model, which includes them stepping up to some sort of anchor tenancy agreement. Rolla Huff (our CEO) has stated publicly that EarthLink is not willing to invest any more money in new network build outs under the old business model—that in which we come in up front with the cash to build out the network and try to buy customers one at a time.

We are speaking with cities at this time about other business model options.

In terms of Helio, we remain very bullish on the joint venture. Just last month, we made this announcement: http://www.earthlink.net/about/press/pr_helio_statement/.

In that press release Rolla said: "We are very pleased that with SK Telecom's funding, Helio will be able to move forward with its innovative business plan without the need for further investment by EarthLink, while continuing to allow our company to have a substantial ownership interest in Helio's future."

"We believe this is good news for EarthLink shareholders and is consistent with our statements over the past two months."

Right now EarthLink and SK Telecom are working out the amendments to the contract between the two companies on Helio in regards to this investment by SKT.

Alex, while we may have restructured the company, which included a downsizing, we don't believe the company is 'in a lot of trouble right now.' We still have approximately 4 million subscribers and continue to be a leader in the industry with the customer at the crux of our business. We recently were awarded the highest ranking by JD Power in dial up and in two of the four US regions for high speed service. This press release can be found here: http://www.earthlink.net/about/press/pr_jdpower_2007.

While there are some naysayers out there in terms of our future prospects, we still continue to provide great tools and service to millions of customers across the country on a variety of platforms.

Thanks,

Jerry Grasso
Director of Corporate Communications, EarthLink