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Google and Earthlink beat five other bidders to win a contract to blanket San Francisco with WiFi coverage which will see users tracked to within 100 or 200 feet and beamed advertisements from local businesses in exchange for free wireless internet access.

The two companies will share the cost of setting up the network, which is estimated at $8m, and Earthlink will adminster user accounts. Each will provide different services: Google’s will be free, advertising-supported and at a top speed of 300kbps, while Earthlink’s will be 1mbps and cost $20 per month, similar to Earthlink’s offerings in several other large US cities. An Earthlink spokesperson told Silicon.com that the network would likely take six to eight months to get up and running.

Stand by for speculation about the interesting possibilities for Google Talk over the network, and more concerns about the privacy implications of the advertising system.

The move is another attempt by Google, which gets virtually all of its revenue from advertising, to push marketing into new waters. Will Google’s proximity advertising plan work? After all, it’s been around (in theory at least) ever since Bluetooth first became a common feature on mobile phones. But companies that specialise in this Bluetooth marketing seem rather thin on the ground, as do examples of proximity text messaging. Of course, Bluetooth-capable devices are not always left on “visible”, which cuts down the possibilities somewhat, and Google’s plan has the usual incentive of offering the users something in exchange for having a few advertisements displayed to them. Either way, it can’t lose - and what’s a few million dollars to a company with $8bn in cash and another $2bn on the way?

Net neutrality bid fails

The Republican-controlled House Energy and Commerce subcommittee defeated a Democrat-backed proposal to protect “net neutrality”, in the face of moves from several big telecommunications companies to charge internet content providers, such as Google, for the download traffic they incur. Republicans opposed to the move said it was too interventionist and could amount to “picking winners and losers”.

Luminaries such as Vint Cerf, a “founding father of the internet” turned “Google internet evangelist”, and Lawrence Lessig, the well-known internet law afficionado, testified at Senate hearings in February in favour of net neutrality, while representatives from telecoms industry groups argued that the proliferation of high-bandwidth internet content was becoming increasingly costly for them.

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