The City completes deal for wireless Internet network 

After more than 10 months of negotiations, The City has reached an agreement with two Internet giants that would make San Francisco the first city of its size to have a free wireless Internet network.

Once implemented, the system would make the entire city an Internet "hot spot," allowing access to the Web everywhere within city limits to anyone with a laptop computer without having to plug in.

Mayor Gavin Newsom signed off on the contract Friday, and it will next come before the Board of Supervisors for a vote, which could take place as early as February.

Under the four-year contract — which includes three four-year options — Earthlink would spend the estimated $15 million to build and maintain the wireless Internet, or Wi-Fi, network. Google would use the network to offer a free Wi-Fi

service that would allow people to surf the Web at eight times the speed of dial-up. Google would sell advertisements to help recover its costs.

To recoup its costs, Earthlink will offer a Wi-Fi service that runs three times faster than the free service for a charge of $21.95 per month. About 3,200 qualifying low-income residents would be able to access the paid service at a discounted rate of $12.95 per month.

As part of the agreement, Earthlink will pay The City $600,000 for right-of-way access and $40,000 annually to be able to use city light poles to mount Wi-Fi equipment needed to build the network. The City would also receive 5 percent of the gross revenue from subscribers, which is expected to generate about $300,000 annually.

"This agreement to bring free universal wireless Internet access to San Francisco is a critical step in bridging the digital divide that separates too many communities from the enormous benefits of technology," Newsom said. "Ubiquitous Wi-Fi will change how residents access education, social services and economic opportunities."

In anticipation of the deal, Supervisor Jake McGoldrick requested The City’s budget analyst draft a report on the feasibility of other Wi-Fi options, such as a city-owned Wi-Fi network. The report is due out next week, he said.

McGoldrick said it’s important for The City to consider the idea of retaining ownership of a Wi-Fi network, "where we don’t give up the multibillion-dollar public asset and hand it over for just a few crumbs."

"Can we do a better job of it? We already do a good job of providing people with water," he said.

Newsom said that a city-owned Wi-Fi network would be a mistake and raises too many questions, such as where does the money come from to build it and who will operate it. The Earthlink-Google deal "allows the private sector to do what it does best," Newsom said.

If the contract is approved, Earthlink is expected to begin construction of the Wi-Fi network this year and start rolling out service by the end of the year.

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