The final pull out by EarthLink Inc. from the municipal public Wi-Fi market appears to be nearing, as two city governments agreed to assume responsibility for local wireless networks owned by EarthLink.

It’s a sad day for EarthLink, since in 2006 it built or took ownership of Wi-Fi networks in several U.S. cities, claiming that it could establish online services for low-income residents and set up the networks with no taxes by generating revenue through advertising and subscription fees. While it all started out with a bang, by last year EarthLink’s Wi-Fi business model began to fall apart and its dial-up Internet subscribers began to leave EarthLink.

EarthLink then dropped its plans to build a Wi-Fi network in San Francisco and subsequently announced that it could not assume all of the upfront costs of building any more networks.  EarthLink then offered several cities the ability to take over the existing Wi-Fi networks already built.

This week, City Councils in Corpus Christi, Texas, and Milpitas, California voted to take possession of their Wi-Fi networks from EarthLink. Neither city will pay for their networks, although Corpus Christi agreed to forfeit $1.59 million in payments that were owed it by EarthLink. Corpus Christi had built its own Wi-Fi network and then sold the technology to EarthLink last March for approximately $5.3 million; Milpitas chose EarthLink to develop its network in 2006, and EarthLink began offering its Wi-Fi service there in December 2006.

EarthLink said it will continue to support its Wi-Fi subscribers in those cities for another month, after which it will offer special deals on its dial-up and broadband Internet services. EarthLink will reportedly refund all payments that it has received for home-based equipment and prepaid Wi-Fi services.

There are only three remaining networks still run by EarthLink: Philadelphia, Pennsylvania; New Orleans, Louisiana and Anaheim, California. EarthLink says it is negotiating with those city governments about the status of their networks.