San Francisco mayor Gavin Newsom today confirmed that EarthLink's restructuring will mean that the company will no longer be involved in his city's planned Wi-Fi network.

According to the Associated Press' Lisa Leff, EarthLink CEO Rolla Huff told Newsom EarthLink would not be able to pursue the deal. "Mr. Huff made it clear it wasn't going to happen with EarthLink; they are getting out of the Wi-Fi business," said city spokesman Nathan Ballard.

CNET's Marguerite Reardon notes that this is a change from yesterday, when "it was assumed the company would fulfill obligations with cities where it had already signed contracts. Now it looks like EarthLink is trying to get out of any deal where it hasn't already begun construction, even if it has a signed contract." In Houston, she notes, that cost them a $5 million penalty.

Still, according to the San Francisco Examiner's Bonnie Eslinger, Newsom insists that the idea of free Wi-Fi in San Fran is not dead. "This is a disappointment, but it's not a denial," he says. "We're going to fast-track the development of a new RFP based on all the work that's already been done."

More here from Wi-Fi Networking News ... and more here from Broadband Reports.