RESEARCH TRIANGLE PARK, N.C. – Major news on Wednesday points heavily toward EarthLink abandoning its municipal wireless fidelity (WiFi) network initiative.

San Francisco Mayor Gavin Newsom’s spokesman told the media that new EarthLink Chief Executive Officer Rolla Huff was pulling out of its WiFi deal with the city.

EarthLink’s partner just happens to be Google.

Huff told the mayor the company was “not going to be able to fulfill their end of the bargain,” spokesman Nathan Ballard said, according to the Associated Press.

Meanwhile, in Houston, EarthLink missed a crucial deadline in deploying a WiFi network there as contracted and must pay a $5 million fine, according to the Houston Chronicle.

Further, on Wednesday, a closer reading of EarthLink’s SEC filing a day earlier disclosed that Donald Berryman, the president of EarthLink’s municipal networks effort, was being terminated. EarthLink had not disclosed that fact in a lengthy press release sent to the media and posted to its Web site.

Huff, who joined the company in June, announced plans on Tuesday to cut EarthLink’s workforce by half – 900 people – and close several offices in the U.S. On Wednesday, he said the company had to refocus.

Pulling out of San Francisco, where its project had run into major political hurdles anyway from privacy advocacy groups and others, and missing the Houston deadline certainly add further evidence to the view that EarthLink will say “bye-bye” to WiFi.

The City of Chicago, meanwhile, said this week it is abandoning a plan for another WiFi project. The city fathers decided the project was too expensive.

As more WiFi projects go belly-up, WiMax could benefit. This is a wireless broadband strategy that has much longer ranger that WiFi. And a leader on that front is Nortel.

Bad news for EarthLink could mean really good news for Nortel. Cities are not going to give up on their search for a means of providing high-speed access to deliver city services and to their citizens as an alternative to phone and cable companies.

The coming months will be very interesting to watch.

City-wide WiFi may pass even before it every gets widely deployed.