You've read my blogs that rail against the Trotskyite vision of San Francisco that the Board of Supervisors holds and you've read blogs that scream with joy when those same Trotskyites sell out to "big money." I am screaming with joy today. 
I predicted two years ago, when the issue of wi-fi was first raised and Google-Earthlink offered to wire the city, that AT&T would stop it from happening.
Looks like I was right. The deal is dead. And the deal was one that AT&T would have been comfortable with ($5 for crummy service and $19 for service that matches AT&T's DSL service in price and speed but not reliability).
My prediction was based on the current AT&T revenue stream in San Francisco from DSL: $50 million a year. No company is going to give up that kind of money when some small fraction of that amount can bribe politicos and protect the revenue. It probably cost AT&T less than $2 million (plus administrative costs) to buy the Board of Suprvisors.