Last weekend, Yahoo picked up on the decline of free WiFi as we posted here.

The largest current roadblock is the financial problems facing Earthlink. It is Earthlink that originally sponsored many urban plans for WiFi infrastructure that would be free to citizens. Confirming this, Yahoo reported;

“Earthlink, a partner for a number of cities, has begun a reorganization that will limit new projects.”

But Earthlink wouldn’t be pulling out if these projects made sense on the bottom line. The problem is? They don’t.

Like clean running water and garbage pickups, WiFi is becoming a true ‘utility’ for most Americans. Internet connectivity is rapidly becoming a key necessity. So critical, in fact, that UNICEF uses it as one of the indicators of how healthy and equipped a child is in their development.

Even so, the piper that must be paid.

“The problem is finding a business model that really works,” said Stan Schatt, analyst with ABI Research.

“Originally the municipalities came into this by saying they would offer Wi-Fi and get a free ride for their internal networks, and it turns out it doesn’t work that way.”

In San Francisco, Google was preparing to back a citywide Wi-Fi program with Earthlink that would be free for users who agree to view online ads, with paying customers getting an ad-free version. But the city was unable to come to terms with Earthlink before the firm pulled out and announced a massive reorganization on August 28.

Chicago officials announced August 31 they would “re-evaluate” their plan after two potential partners failed to come up with a suitable plan because a network required “extraordinary financial support” from the city.

“In Chicago and in many other cities, a municipal Wi-Fi network was initially envisioned as a way to provide cheaper, high-speed access to consumers,” said Hardik Bhatt, the city’s chief information officer.

“But given the rapid pace of changing technology, in just two short years, the marketplace has altered significantly.”

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