It goes around and around and comes out there: The city of Philadelphia has announced its intention to purchase the Wi-Fi network from Network Acquisition Company (NAC), a firm that itself acquired EarthLink's in-progress network for a song with a promise to build it out and to change its name from the placeholder it chose. Apparently, the placeholder turned out to be correct: the firm acquired the network and operated it, but it seems little else emerged in its plans, made before the massive economic downturn. NAC took control of the network in June 2008 (see "Eleventh Hour Rescue for Phila. Network.")
The Philadelphia Business Journal seems to have but sketchy details about the deal, which would commit the city to spending $17m from 2011 to 2015 (fiscal years) to expanding its core fiber network and integrating and expanding the Wi-Fi network. The wireless network would be used for municipal and public safety purposes, as well as limited public place Internet. Phila. told me years ago that it spent millions each year on leased digital lines from telecom; many cities have built fiber networks and rings to conserve that cash in house while boosting network speeds often by a factor of 10 to 100 times the leased line rate.
Update: The Philadelphia Inquirer has more information. The city will pay NAC $2m, which is roughly the same amount that NAC paid EarthLink and other parties. The $2m from the city will comprise $1.5m from homeland security grants and $500K from public-safety funds.
In this case, the city claims a $9m cost conservation against $17m in spending; the operating savings don't include increased productivity or other measurable improvements outside of pure network operation costs, however.
This is a far cry from Philadelphia's 2004 plan to give free Internet service to everyone via Wi-Fi; EarthLink's goal for Wi-Fi at subsidized and dial-up prices to residences through outdoor transmitters; and NAC's plan to mix free, fee, and business services of varying kinds to make a go of it.
Philadelphia is now trodding the path that many other cities have followed in the last five years, which is focusing on government efficiency through cost conservation and using Wi-Fi and public safety wireless as an adjunct to core wired networks.