EarthLink said late Wednesday that it is bailing out of a contract to build San Francisco’s free Wi-Fi service.
Earlier on Wednesday, the city of Houston announced that EarthLink had agreed to pay a $5 million penalty to the city for not meeting its first deadline for building its wireless network. EarthLink has nine months to start construction or figure out a way to get out of the contract altogether.
And now, the company has also dissolved its contract with San Francisco, which was approved in January but was awaiting final approval from San Francisco’s Board of Supervisors.
From a legal standpoint (contract law), it seems possible that Earthlink might just escape the contract entirely (maybe, but there might be details I don’t have) because the Board of Supervisors never really accepted their offer (or never generated a final offer for Earthlink, depending on the details of the situation).
So I think the San Francisco mayor might possible be right to blame the Board of Supervisors, but then again, the Board might be right to say they were right to be leery, given Earthlink’s meltdown:
San Francisco Mayor Gavin Newsom, who had stated publicly that he felt the current contract was sufficient, blamed the Board of Supervisors for dragging its feet and blowing the deal.
Supervisor Ross Mirkarimi said the mayor was completely wrong in his assignment of blame.
“The mayor wanted us to rush into a deal that was half-baked,” he said. “And now he’s trying to cover his tracks instead of looking at the real reason this deal fell through which is the fact that EarthLink is having a complete financial meltdown.”