| 5/13/08 - EarthLink (Nasdaq: ELNK) 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.
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