Mayor Bill White has just announced a $5 million deal with EarthLink to provide city-wide wireless Internet coverage.

The announcement may sound a bit familiar.

In April, the City Council approved a contract to pay EarthLink $2.5 million to build a network that would blanket 95 percent of the city in a free wireless Internet “bubble.” The network was estimated to cost EarthLink about $50 million to construct.

But months later, the contract has languished. Under the terms of the April agreement, the company would have owed the city $5 million if it was unable to do the job.

In his update on technology initiatives before the City Council on Wednesday, Mayor White told members that EarthLink has run into trouble finding the money to pay for Houston’s wireless infrastructure.

“Their CEO died. Their CEO and board was prepared to use their balance sheet to finance the project. And now, in light of the size of this, and perhaps other efforts, they would like to get other sources of project financing," Mayor White said." And they can’t do that before the deadlines are due.”

So the mayor said the city and EarthLink have negotiated a new deal: EarthLink will pay $5 million in cash to the city, in exchange for a nine-month delay.

“They want an extension, and they’re paying five million dollars to get it,” White said. He also indicated the deal opens the door for other companies to come forward with their own plans, if EarthLink is unable or unwilling to build Houston’s network.

As envisioned, Houston’s wireless Internet project is the largest such proposal in the nation. It would allow any computer or mobile device equipped with a wireless receiver to access the Internet from nearly anywhere in the city.