Internet service provider EarthLink announced Tuesday a restructuring plan to cut costs. The plan includes cutting 900 jobs, and closing the company’s offices in Orlando, Florida; Knoxville, TN; Harrisburg, PA and San Francisco, CA. Further, the offices in Pasadena, CA and Atlanta, GA will be reduced in size.

 

So what does this have to do with wireless? In addition to its other operations, EarthLink has been involved in quite a few high-visibility municipal WiFi projects the past few years, including Philadelphia. The restructuring naturally raises the question: will EarthLink continue signing on to new muni WiFi projects?

 

In April, the company hinted that muni WiFi may not be a part of its future plans. At that time, EarthLink officials said they were evaluating muni WiFi projects it already was involved in (Philadelphia, New Orleans, two in California) to determine the profitability of such deals.

 

EarthLink’s CFO in April stressed that the company would see through the projects it had already sign on with, including the network in Houston, Texas. At the time the company was facing losses of $29.96 million for the first quarter of 2007. Since then second quarter 2007 results have been posted, showing net losses of $16.3 million.

 

I received an e-mail this morning from Craig Settles, a muni WiFi advocate and author of several books including Fighting the Good Fight for Municipal Wireless. Settles said EarthLink is slated to make another announcement today, and he won’t be surprised if it has to do with the company’s municipal WiFi business.

 

Settles said that, if EarthLink does bow out of the muni WiFi market, it will be in large part because most of these wireless networks have been built for consumer use—a potentially losing proposition since consumers are expensive to land as customer, and even more expensive to retain.

 

In his e-mail, Settles suggested that EarthLink could salvage its piece of the muni WiFi pie by repacking its wireless offering to target governments and businesses rather than consumers. This could help the company get a government, for example, to sign on as an anchor tenant, helping to guarantee the long-term financial viability of the network.

 

“Likewise they should develop an aggressive business-focused marketing campaign that capitalizes on a continually growing interest among small and medium sized businesses for mobile workforce applications,” Settles said in his e-mail.

 

Keep your eyes peeled today for more news from EarthLink—it just could be that the muni WiFi project in your city could hang in the balance.