EARTHLINK TO DISCONTINUE OPERATION OF ITS MUNICIPAL WI-FI NETWORK IN PHILADELPHIA|
Decision comes after EarthLink's agreement to transfer network to non-profit for free unravels.
Wi-Fi customers notified about 30-day transition period and alternative access offers
ATLANTA, May 13, 2008 — EarthLink (NASDAQ: ELNK) today notified its Wi-Fi customers in Philadelphia that EarthLink is terminating its Philadelphia Wi-Fi service and that EarthLink is providing its customers a thirty-day transition period through June 12, 2008.
After months of negotiations with the City of Philadelphia and a non-profit organization in which EarthLink offered to transfer to either the City or to the non-profit – for free – the entire $17 million Wi-Fi network, as well as pay cash and donate new Wi-Fi equipment, the transfer unraveled due to unresolved issues among the City, Wireless Philadelphia and the non-profit.
"EarthLink has worked diligently for many months to transfer our Wi-Fi network to a new owner – at no cost," said Rolla Huff, EarthLink's chairman and chief executive officer. "Unfortunately, our hope that we could transfer our network to a non-profit organization that had planned to offer free Wi-Fi throughout Philadelphia will not be realized. Since we have exhausted our efforts to find a new owner of the network, our only responsible alternative now is to remove our network at our cost and assist our Wi-Fi customers with alternative ways to access the Internet."
EarthLink will continue to provide Wi-Fi service to its customers in Philadelphia during a transition period that will end on June 12, 2008. EarthLink will begin decommissioning the network shortly after the transition period. EarthLink is contacting its customers in Philadelphia to provide information about the termination of service and assist in the transition to other EarthLink Internet access services.
EarthLink has also filed today a proceeding in federal court seeking a declaration that EarthLink may remove its equipment from the City's street lights and that EarthLink's total potential liability may not exceed $1 million.
EarthLink reclassified its municipal Wi-Fi assets to discontinued operations in the third quarter of 2007. EarthLink expects these actions will have no material impact to its current financial guidance.
Safe Harbor Statement
Certain of the statements contained in this presentation are forward-looking statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described. With respect to such forward-looking statements, the Company seeks the protections afforded by the Private Securities Litigation Reform Act of 1995. These risks include a variety of factors, including competitive and regulatory developments and risk factors listed from time to time in the Company's SEC reports. The lists in the Company's SEC filings are intended to identify certain of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere herein. These factors are not intended to represent a complete list of all risks and uncertainties inherent in the Company's business, and should be read in conjunction with the more detailed cautionary statements and risk factors included elsewhere in the Company's most recent filings with the SEC.
"EarthLink. We revolve around you™." As the nation's next generation Internet service provider, Atlanta-based EarthLink has earned an award-winning reputation for outstanding customer service and its suite of online products and services. EarthLink offers what every user should expect from their Internet experience: high-quality connectivity, minimal online intrusions and customizable features. Whether it's dial-up, high-speed, voice, web hosting, wireless or "EarthLink Extras" like home networking or security, EarthLink connects people to the power and possibilities of the Internet. Learn more about EarthLink by calling (800) EARTHLINK or visiting EarthLink's website at www.EarthLink.net.