updated 8/28/2007 5:19:38 PM ET 2007-08-28T21:19:38

An ambitious plan to blanket the city with wireless broadband Internet will be shelved because it is too costly and too few residents would use it, Chicago officials said Tuesday.

"We realized — after much consideration — that we needed to reevaluate our approach to provide universal and affordable access to high speed Internet as part of the city's broader digital inclusion efforts," Chicago's chief information officer, Hardik Bhatt, said in a statement.

The plan to blanket Chicago's 228 square miles with wireless Internet access was announced early last year when Chicago leaders said they hoped to become one of the largest cities to offer all-over access to the Web.

Instead, the city said its negotiations with private-sector partners, including EarthLink Inc., have stalled because any citywide Wi-Fi would require massive public financing. The city had hoped to provide only infrastructure for the network.

Tuesday's announcement makes Chicago the latest in a string of municipalities to encounter troubles with their municipal broadband initiatives because of ballooning budgets and dwindling usage that's led to scant revenue generated by the projects. About 175 U.S. cities or regions have citywide or partial systems.

"But given the rapid pace of changing technology, in just two short years, the marketplace has altered significantly," Bhatt said.

Atlanta-based EarthLink, which had been negotiating with Chicago about the municipal network, has said it was studying the performance of its existing municipal wireless Internet networks before deciding how to move forward with similar networks elsewhere.

"We're seeing this evolve as we learn more about these networks, and the city needs to think about this again from its own business perspective," Tom Hulsebosch, a vice president of EarthLink's municipal sales, told the Chicago Tribune.

Meanwhile, Chicago will be among the first three cities nationwide to have access to a new high-speed wireless network that's part of an emerging technology called WiMax.

Sprint Nextel Corp. announced plans this spring to offer wireless Internet speeds that match DSL and cable TV modems.

WiMax is derived from the same technology as Wi-Fi. Unlike Wi-Fi, which provides wireless Internet access over a several-hundred-foot range, a WiMax signal can blanket a much wider area.

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