The total annual savings to existing Internet service customers in San Francisco could be as much as $18 million a year if Mayor Gavin Newsom’s high-profile agreement with EarthLink and Google to create a free citywide wireless Internet network is approved by the Board of Supervisors, according to a report released Friday.
Many residents who pay for cable, digital subscriber line or the slower dial-up Internet service are likely to switch over to the two Internet services that would be offered under the EarthLink-Google agreement, according to the Controller’s Office report. This would create a total estimated consumer savings of between $9.6 million and $18 million a year.
The most likely to benefit are the nearly 71,000 with slower dial-up connections, according to the report, which estimates as many as 80 percent of those users would switch to the free city Wi-Fi.
“Significant numbers” of the estimated 61,300 households without Internet access will also use the free service, the report said.
The Board of Supervisors Budget and Finance Committee is expected to hold a hearing on the agreement, which requires approval by the full board, today.
Some board members have argued The City should get more money out of the deal. Others have issued calls to pursue a city-owned network they say would better serve residents, since it would not be based on making a profit.
Mayor’s Office spokesman Nathan Ballard said, “We can close the digital divide for free. The only thing standing in our way is the Board of Supervisors. It’s in their hands now.”
Under the agreement, Google would provide free service at a relatively slow rate of 300 kilobytes per second. EarthLink would pay the city about $2 million during the initial four-year term of the contract and offer a faster, 1 megabyte-per-second service for a charge of $21.95 per month.
Residents are paying rates from nearly $20 for dial-up connections to about $42 for high-speed cable connections, according to the report. Supervisor Chris Daly, who chairs the committee, said he expected the agreement will undergo “multiple” hearings. “I think there are a lot of strong feelings on both sides,” he said.
One obstacle the agreement could face is if someone decides to appeal the Planning Department’s decision that the installation of Wi-Fi equipment on The City’s utility poles does not need to undergo an environmental review under the California Environmental Quality Act.
If the Board of Supervisors upheld such an appeal, an environmental review would be required, which could take several months.