The Southern California city is key to EarthLink's strategy as it adapts to changing online habits and the evaporation of its dial-up business. Anaheim is the biggest city so far to embrace a nationwide trend of creating citywide wireless internet access for residents and businesses.

"We want to see competition for broadband internet access," said Mayor Curt Pringle, who will join EarthLink executives for a "wire-cutting" ceremony. The project is expected to be completed by the end of the year.

The service will cost $22 a month, more than the base prices of limited broadband offered by phone and cable companies that provide most internet access across California.

Unable to receive cable modem service at her Caracol Toy & Candy shop three blocks from City Hall, Rosie Navarrete became EarthLink's first customer, switching to wireless during a test period that started at the end of April.

"The first thing I noticed was that I got reception everywhere in the store and the surrounding areas outside," Navarrete said.

EarthLink figures it needs to attract 15 percent to 20 percent of the households with internet access to make its effort profitable.

"We're looking at it as a replacement for dial-up internet users, for people who are new to the internet and for those who want a roaming service," said Donald Berryman, president of EarthLink Municipal Networks.

About half the nation's online households still use their telephone connection to dial into the internet, according to Forrester Research Inc.

Last year, Earthlink lost about 300,000 dial-up customers. Despite gains in broadband customers, its net subscriber base fell by 73,000.

EarthLink doesn't own any broadband access pipes and, given changes in regulations, it can't assure itself of holding onto its broadband customers. That's why EarthLink Chief Executive Garry Betty decided to go after the municipal wireless market.

The company is starting to put together a 135-square-mile network in Philadelphia as well as systems in New Orleans and in the Silicon Valley town of Milpitas, Calif. It has won contracts to unwire San Francisco and Aurora, Colo., and is a finalist in bids for building networks in Long Beach, Calif., Pasadena, Calif., Minneapolis, Arlington, Va., and Grand Rapids, Mich.

In Anaheim, EarthLink is building two interconnecting systems based on wireless technologies known as Wi-Fi and WiMax.

Residents within six square miles of City Hall downtown can get wireless broadband now, and coverage will grow to 10 square miles within a month, said Jay Dugas, the company's local network director. By the end of the year, Earthlink plans to cover all of Anaheim's 50 square miles.

At some point, Dugas said, EarthLink also will offer higher speeds to businesses.

But even as EarthLink completes its network, AT&T is rushing to finish upgrading its system to a mix of fiber-optic and copper lines to provide more reliable digital subscriber line, or DSL, and pay TV.