updated 5/26/2006 3:28:38 PM ET 2006-05-26T19:28:38

Internet service provider EarthLink Inc. has won approval to build a wireless network around a free city-owned system that made its debut last fall in the wake of Hurricane Katrina.

Atlanta-based EarthLink said it would offer two levels of service — one free and a faster version for a fee. The company also said it would allow competing Wi-Fi providers to use its network for a price.

Initially, EarthLink's system will cover about 15 square miles of the 181-square mile city, including the downtown business district and the French Quarter, along with other areas that will be decided later, said Bill Tolpegin, EarthLink's vice president of development and planning for municipal networking.

The franchise, approved Thursday by the City Council, covers all of New Orleans, he said.

"As the city grows and recovers, we plan to expand along with that," Tolpegin said in a telephone interview Friday.

The city is not taking down its existing system. It will continue to be accessible to the public and provide a dedicated network for first responders to disasters, said Greg Meffert, the city's technology director.

Tolpegin would not disclose the cost of installing EarthLink's system, which is expected to be running this fall. Users of the high-speed service would likely pay about $20 per month, he said.

The city's current network was put together with $1 million in donated equipment after Katrina. Officials have estimated that it has several thousand users a day.

The city's network runs at 512 kilobits per second — much faster than dial-up connections, but slower than high-speed services offered by private providers. Under state law, it will have to be slowed to 128 kbps when the city's post-Katrina state of emergency ends.

The city has encountered stiff opposition from the telecommunications industry over its desire to continue running it at 512 kbps after the disaster declaration is over. A bill pending in the Legislature would extend the faster service for a year after the declaration ends.

EarthLink said its free service would operate at up to 300 kbps and its high-speed service would be 3 1/2 times faster. Tolpegin said the free system would operate "as long as the city is rebuilding and it makes sense to offer the service."

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