Municipal WiFi is one of those touchy subjects for many people with some believing that all users should have to pay for the service because Internet access is a luxury not a necessity. On the other hand some believe that municipal WiFi should be offered for free to low income families as a way to lessen the digital divide and improve education.

Philadelphia has for a few years been at the head of the municipal WiFi spear. Philadelphia announced in 2006 that EarthLink would be building and installing a WiFi network in the city that was scheduled to be fully deployed in Q3 2007.

DailyTech reported in March 2008 that EarthLink announced it was pulling out of the Philadelphia municipal WiFi network as well as similar networks that were in use in Portland, Oregon and Tempe, Arizona.

BusinessWeek reports that EarthLink is now closing the municipal WiFi network in Philadelphia and that its customers have been notified. EarthLink says that it is giving customers using the service in Philadelphia a 30-day notice and assisting them in transitioning to other EarthLink services.

Other cities that are in the same predicament as Philadelphia with EarthLink WiFi networks include Corpus Christi, Texas and Milpitas, California. Both these cities have taken over ownership of the networks EarthLink abandoned in the cities free of charge.

According to EarthLink, the closure of the Philadelphia network comes after months of talks with the city of Philadelphia and an unnamed nonprofit organization in the area. EarthLink has offered to transfer ownership of the WiFi network to the city or the organization for free.

The catch is that EarthLink is seeking to be allowed to remove its hardware from street lights in Philadelphia and has filed a court proceeding to allow the removal of the equipment and to limit its liability to no more than $1 million. The termination of the network is not expected to affect EarthLink’s financial outlook. However, BusinessWeek reports that EarthLink stock is down $0.17.