EarthLink will build out the wireless network in the city of New Orleans, city and company officials said on Friday, in a move that will strengthen the existing network in the face of lobbying efforts from telephone companies.

After the hurricane ravaged New Orleans, city officials quickly built a free wireless network over parts of the city in order to help residents and small businesses communicate while rebuilding.

But telcos like BellSouth felt threatened by a free wireless network that can offer Internet access and voice service.

The phone companies’ argument is backed by state laws that say that a publicly owned, wireless network that offers fast wireless service is illegal. New Orleans current wireless service was allowed because it was in a state of emergency after the hurricane.

The EarthLink partnership will likely prolong the life of the emergency network to give the residents more time to use the free wireless service, and enhance the network for wider use.

EarthLink’s president of municipal networks, Donald Berryman, said it will offer a free service for a period of time that residents need, though he said that period of time has not been determined.

Mr. Berryman called the temporarily free service “a long-term investment in rebuilding the city,” that will help the Internet service provider get a foothold once the city is back up and running.

Mr. Berryman said EarthLink will first build a 15-square-mile network that will offer both a free service without ads, and a fee-based faster service for about $21.95 per month. That first section of the network will be in the downtown and French quarter areas and will cost the company $3 million to $5 million.

The network will be owned by EarthLink, which will rent space on lampposts from the city and pay for a nonexclusive wireless franchise agreement.

CrescentCity

BellSouth has reason to be nervous. The company has been investing in communications in the area for years, and offers a proprietary wireless service to the city for a higher price.

The telcos are likely to fight back with lower prices, faster service, or other offers to bring in consumers. The fact that EarthLink has joined the race means the fight will just be on a bigger scale.

One person that’s ready for the battle is Greg Meffert, New Orleans CIO. In an interview in March Mr. Meffert said the wireless network was already helping more than 15,000 residents communicate and manage businesses, and said he was even willing to face jail time to keep the free network running (see WiFi Fight Brews in Big Easy.)

In the face of the partnership with EarthLink, he is now more hopeful. “I'm cautiously optimistic and actually hopeful that we all are OK now since we are starting to move ahead here," said Mr. Meffert in an email exchange.

Mr. Meffert would also like the city’s free service to extend as long as possible to help the city. He said the network is “not just a lifeline to these folks, but an accidental icon of defiance in a New Orleans that is being reborn again,” he said.

Mr. Berryman confirmed that the length of time that EarthLink will offer the free service will be determined by the ISP over the coming months.

EarthLink’s Muscle

Now that the city has found a major Wi-Fi player in EarthLink, the duo can fend off attacks from incumbents, and help the network bring in revenue from paying customers.

EarthLink has won bids to build and run Wi-Fi networks in other U.S. cities, including San Francisco, Philadelphia, and Anaheim (see Google, EarthLink to Unwire SF).

New Orleans needs EarthLink’s help to build and run a network. Analysts and industry executives were very skeptical that the city could build and run a wireless network on its own.

Mr. Berryman said the network coverage of the current service run by the city is “spotty.” Over the next few months, EarthLink will help to change that, though eventually residents will have to pay monthly fees for that improvement.

Contact the writer:KFehrenbacher@RedHerring.com