EarthLink and AT&T are the leading bidders for the Chicago network: AT&T has previously bid only in conjunction with MetroFi for municipal Wi-Fi projects. AT&T is focused on Chicago; EarthLink said they'll reach out to suburbs, too, if they win the bid. (MetroFi has been working with some suburbs, although a recent change in their business model that requires cities to make minimum municipal service purchases seems to have caused Batavia and two other cities to rethink a deal.) NextWLAN has apparently made a proposal as well that calls for indoor wireless to supplement outdoor systems.
Sprint has also chosen Chicago as one of its early mobile WiMax rollout cities, which could give residents an abundance of choices. AT&T is relying on a multiple play, with DSL to the home, wireless via the former Cingular, and Wi-Fi allowing them to have a rich bundle of services. EarthLink has the experience in building networks, and could be seen by Chicago as a useful alternative to the incumbent.
The article doesn't misstate WiMax's properties, but the fact that individual Wi-Fi transceivers span hundreds of feet and WiMax miles isn't important if you're building dense service. You still have to build out densely placed WiMax nodes to have enough service available to cover a busy network, just as you need many Wi-Fi nodes. You need more Wi-Fi nodes than WiMax per square mile, but Wi-Fi is also cheaper to deploy, especially when you factor in license costs for WiMax.