MetroFi Is Dot.Gone

In what is proving to be yet another high-profile Metro Wi-Fi failure, MetroFi, a San Jose-based startup that raised over $15 million from Sevin Rosen and August Capital, is close to shutting down, according to WiFi NetNews and MuniWireless, two blogs that follow the MuniFi industry closely.

MetroFi is trying to sell its citywide Wi-Fi networks in Portland (Oregon), Aurora and Naperville (Illinois) and Santa Clara, Cupertino, Sunnyvale, Foster City and Concord (California). MetroFi founder, Chuck Haas, says he is also exploring the sale of MetroFi itself to a third party.

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It’s Official: Corpus Christi Dumps EarthLink

Last night, the city council in Corpus Christi, Texas, voted 7-0 to ditch a contract that sold its Wi-Fi network to EarthLink. Corpus Christi had signed the contract with EarthLink in March 2007, when the ISP agreed to pay $5.3 million, plus an additional $340,000, during the first year of service. EarthLink also agreed to pay the city $1.59 million over the course of the next three years.

But less than a year after the relationship was formed, EarthLink began its flight from municipal Wi-Fi networks, leaving the fate of the city’s contract uncertain. Corpus Christi had built out a fully functioning network to provide meter reading, emergency response services and other city-related applications. It does not try to provide free wireless broadband access to citizens, and sold the network to EarthLink so it could provide broadband to residents for a fee.

An assistant city manager told the Corpus Christi Caller-Times that, under the city-proposed plan, EarthLink would not have to pay out the $1.59 million, but that the city would get almost $3 million in improvements to the network, as well as equipment, as part of EarthLink’s exit. While it will cost the city $50,000 a year to operate the network, it just wants to get out of an uncertain situation. Why wait to be dumped when you can do the walking?

More EarthLink Cuts?

The Helio-MuniFi experiments haven’t really worked out for EarthLink. One of the leading independent service providers, it has hit the skids. They gave the pink slip to nearly 900 employees in August. And it seems the spending cutbacks on Helio and MuniFi came too late. Now we’re hearing from multiple sources that another round of cuts is coming — and this one is going to be deep. Our friends at DSL Reports have heard something similar.

Even the senior ranks aren’t going to be spared, we are told. Could the new CEO be on his way out as well? EarthLink might also lose its voice…its voice business, that is. Stay tuned for further details. I think this company might be getting ready to be taken over by a private equity shop, just like Covad.

Interesting: Covad, Vonage, SkypePhone, Akamai HD, Hypres & Apple Airport

[qi:076] Covad to be acquired by Providence Equity Platinum Equity Partners for $1.02 a share in cash, a 59 percent premium to its closing price on Friday. Covad is one of the handful of independent broadband service providers to have survived the telecom bust. Providence, I suspect, will have Covad focusing on wholesale and wireless broadband. Maybe it is time for the private equity guys to take a cold, hard look at EarthLink (ENLK).

[qi:017] Vonage and Verizon kiss and make up. The patent fracas is going to end with a settlement that will see Vonage (VG) paying out either $80 million or $120 million. Vonage has seen seeking a rehearing of its case, and if it wins, Verizon (VZ) gets $80 million. No one can tell me that this patent mess isn’t about the money. The ironic thing is that the shareholders who bought into Vonage’s independence have seen their dollars end up in the pockets of the incumbents.

[qi:83] Skype launches 3SkypePhone. It was rumored for a while, but Skype (EBAY) and 3 have launched a Skype-branded phone that lets 3 customers make free Skype-to-Skype calls and send free Skype instant messages from their mobile phone to other Skypers by pushing a single Skype button on the phone.

[qi:032] Akamai shows how HD is done. Is the Net ready for HD video? Akamai (AKAM) says yes, and puts up a site for show-and-tell.

[qi:045] Hypres combines superconductivity with software radios. Hypres, a superconductor maker that we recently profiled, has signed a deal with SELEX Communications, a division of Finmeccanica Company (a huge defense and high-tech company in Italy), to develop an all-digital receiver for the SELEX Communications software-defined radio.

[qi:012] How good is Apple Airport Extreme (AAPL)? Information Week thinks it is better than the rest. It’d better be, given how expensive the damn thing is.