CHICAGO -- NXTcomm -- Chicago could be the next major city to award a contract for a large municipal WiFi network, Unstrung has learned.

Industry sources at the NXTcomm show and elsewhere say the city is poised to choose between the teams of AT&T Inc. (NYSE: T) and Motorola Inc. (NYSE: MOT) or EarthLink Inc. (Nasdaq: ELNK) and Tropos Networks Inc. to deploy a 200 square mile WiFi mesh network in the city.

"From what I've heard, AT&T and Motorola have a slight advantage," says one source familiar with the proceedings. It is not yet known when the deal will be announced, but it is expected to be soon. All sources say the competition for the contract is now between these two teams.

Motorola is actually collaborating with EarthLink and Tropos on deploying mesh networks and associated infrastructure in five other U.S. cities, including Milpitas and Anaheim in Calif. Our sources say, however, that Motorola will be using its own mesh equipment if the AT&T-backed bid wins in Chicagoland. (See The Milpitas Model.)

Chicago has had an RFP out for the deployment since September of last year. Back in 2005, the city estimated that it might spend $20 million or less to deploy a municipal WiFi network similar to the set-up in Philadelphia. (See New Muni Models.)Some of the bloom has come off the muni rose since 2005, however, with politics, deployment delays, and technical issues plaguing some of the most high-profile municipal rollouts in the U.S. EarthLink's flagship San Francisco deal in particular is still bogged down with politics. (See What's Muni Wireless Good For? and Mayor Cooks His Own Goose.) None of which seems to have discouraged Chicago yet. Nonetheless, the price of such a large deployment is expected to easily top the original $20 million or less estimate. One source takes an educated guess that this project will cost "at least $30 million" for the mesh rollout with supporting backhaul gear.— Dan Jones, Site Editor, Unstrung