Earlier this year, we noted how the press became enamored with the idea that the recession was driving people back to dial-up, even if reporters lacked a shred of data to support the idea. The articles (be they from the Associated Press, Tampa Tribune or Chicago Tribune, all started with the sad tale of some poor Joe or Jane who decided to slum it on 56kbps because his or her retirement fund tanked.

They went on to infer a broader trend was afoot, despite quoting analysts in their own pieces who insisted otherwise. Many of the stories quoted Earthlink's Kevin Brand, who got the opportunity to pitch sluggish, frequently unreliable dial-up to the nation's cheapskates and masochists as part of a $7.95/month dial-up "recession special," which kind of floated over the fact that you also need a traditional landline:So how's that mass-return to dial-up and all of the free advertising working for Earthlink? Not particularly well. According to the company's second quarter earnings, Earthlink continues to hemorrhage dial-up users, and reported lower sales and profits for the second quarter. Earthlink still has 2.4 million subscribers, down from 3.3 million at the end of the second quarter of 2008 (a 26% drop).

According to user posts in our Earthlink DSL and Earthlink Cable forums, the carrier appears to be having a significant server outage that has prohibited Earthlink customers from accessing their e-mail or any Earthlink-hosted website. Calls to the company's 888 number indicate the company is working to resolve the problem, and the company's representatives say the troubles are related to a power outage in Pasadena. Atlanta-based EarthLink serves about 2.8 million customers, but has struggled to stay relevant with the decline of dial-up. Without the ability to resell service via next-generation networks, Earthlink turned to options like BPL and municipal Wi-Fi without success.

Earthlink released their fourth quarter earnings last week, posting a yearly profit of $189.6 million in 2008. However, Earthlink recently lost $80 million on Muni-Fi, their investments in broadband over powerline (BPL) have gone nowhere, the government says they can't share access to next-generation broadband networks, and their effort to run an MVNO (Helio) flamed out spectacularly. So while Earthlink is leaner and more profitable, it's not exactly clear what they plan to do to make money after 14 years as an ISP. The carrier recently stated it was going to focus on acquiring dial-up operators (including AOL's dial-up customers) -- but now says that is no longer happening.

Earthlink lost $80 million on Muni-Fi last year, their investments in broadband over powerline (BPL) have gone nowhere, the government says they can't share access to next-generation broadband networks, and their effort to run an MVNO (Helio) flamed out spectacularly. In addition, they recently laid off a swath of employees and suggested their hope for survival lays in the lap of refocusing on dial-up. If there's a company that's on death watch, it's Earthlink -- yet the company's latest quarterly earnings indicate the company actually posted a $55 million profit last quarter. There's still serious questions about your future when your primary hope lies with a dying technology -- but for now Earthlink lives on.....

In what's not particularly surprising news, Earthlink today stated that the struggling internet service provider will be cutting more jobs. After cutting 900 jobs last year, the ISP has informed "less than 60" employees they'll be terminated sometime in the next four months. The company lost $80 million on Muni-Fi last year, their investments in broadband over powerline (BPL) have gone nowhere, the government says they can't share access to next-generation broadband networks, and their effort to run an MVNO (Helio) flamed out spectacularly. Their CEO's survival strategy? Try to focus on long term customers and re-focus the ISPs efforts on dial-up connectivity.

Earthlink is in a bit of a bind. The company lost $80 million on Muni-Fi last year, their investments in broadband over powerline have gone nowhere, the government says they can't share access to next-generation broadband networks, and their effort to run an MVNO (Helio) flamed out spectacularly.

I remain morbidly fascinated in seeing what the barely animated corpse of Earthlink plans to do next. The company lost $80 million on Muni-Fi last year, their investments in broadband over powerline have gone nowhere, they can't share access to next-generation broadband networks, and their effort to run an MVNO (Helio) flamed out spectacularly.

Aside from their failed investment in municipal Wi-Fi and their unproductive investment in BPL (broadband over powerline technology), one of the biggest money sinks for the teetering Earthlink was Helio, an MVNO (Mobile Virtual Network Operator) they jointly ran with Korea Telecom. Today it was announced that Virgin Media purchased Helio for the rock-bottom price of $39 million.

As they threatened last week if they couldn't transfer ownership, Earthlink is pulling the plug on Philly's incomplete Wi-Fi network. According to their press release, the company is giving users of the network until June 12 to steal service from any of a million nearby unsecured hotspots switch to another provider.

It looks like the public Wi-Fi network in Philadelphia may be shut down if the city can't negotiate some kind of transfer deal with Earthlink. Earthlink stopped accepting new customers last week, and gave the city until today to negotiate an offer, but the city's mayor doesn't seem keen on the idea of spending city money.

Earthlink is in the process of figuring out what to do with the few remaining Wi-Fi networks left over from its ambitious plans to blanket the nation with wireless cities. As part of that process, they have announced that they will be shutting off their New Orleans Wi-Fi network as of May 18th. Earthlink apparently tried to sell the network as well as to transfer it to either the city itself or to a third party; all attempts to do so have failed and New Orleans will now just lose the network entirely. Earthlink assures customers in the area that the company would be happy to provide them with alternate EarthLink high-speed broadband or dial-up services after their service is terminated. After significantly cutting its spending, Earthlink was able to turn a profit in the first quarter of this year.

A money-generating trend that has cropped up in the last year is for ISPs to use DNS redirection services to replace the old “page not found” error sites with sites full of advertising. This has been controversial in the past because it’s irksome to users who are running apps and tools that require a “clean” connection. But it turns out that the issue may be more than just annoying; recent reports say that these pages cause vulnerabilities for the web in the form of security holes accessible by hackers.

The problem came to the attention of the media when it was revealed that Earthlink’s DNS redirection (through a service called Barefruit) had a bug that “may have allowed attackers to launch undetectable phishing attacks against any Internet site”. That bug has now been fixed but the problem remains an area of concern because so many different ISPs are using similar services.

By the time that Earthlink realized that its ambitious plans to build out citywide wireless networks weren’t going to happen without a whole lot of money, they already had five standing networks that they needed to deal with. They said at the time that they would be seeking to give those networks back to the city or sell them off. This week they completed the return of two networks – in Corpus Christi, TX and Milpitas, CA. They remain in negotiations with Philadelphia, New Orleans and Anaheim to determine the terms of releasing or selling those networks.

When Corpus Christi, TX started setting up its citywide Wi-Fi network several years ago, it gained recognition as a leading innovative city for wireless technologies. However, in 2007 the city made the mistake of selling their municipal network to Earthlink in the hopes that the provider would build out the network so that it could provide Wi-Fi to residents instead of only government employees.

Earthlink's in a tough spot. They won't be able to share next-gen telco networks, their partnership with Covad goes only as far as that company's ADSL2+ network does, cost cutting is affecting support quality, their Muni-Fi efforts have bottomed out, and their investments in BPL were a waste of money.

CNET has a fun article this week taking a look back at twenty five leading dot-com websites and where they wound up over the years. Many of these names, including CNET itself, are still popular today although they look a lot different than they did when they first launched.

Terry Phillis, Chief Information Officer for Philadelphia’s Mayor’s Office, has stated that the city expects EarthLink to bail on its construction of a citywide wireless system. He says that more will be known within the next sixty days but the city is making back-up plans for municipal Wi-Fi based on the belief that EarthLink will sell (or entirely abandon) the system.

Earthlink's in a tough spot. They won't be able to share next-gen telco networks, their partnership with Covad goes only as far as that company's ADSL2+ network does, cost cutting is affecting support quality and their Muni-Fi efforts netted fewer subscribers than expected.

It's been well-discussed that Earthlink has put their municipal broadband aspirations on hold as the company deals with its financial headaches. On the heels of firing half of their workforce, the company pulled out of projects in both San Francisco and Houston.

Back in August Earthlink paid out a $5 million penalty to the city of Houston for its failure to meet deadlines in citywide Wi-Fi development. It’s not clear yet at this time whether Earthlink is going to continue with the project or not although most signs point to no. In the meantime, Houston is using the money that they gained from the loss to work on bridging the digital divide in their community. This is part of a digital inclusion plan to get Internet access to the city’s student and elderly populations.