In what is proving to be yet another high-profile Metro Wi-Fi failure, MetroFi, a San Jose-based startup that raised over $15 million from Sevin Rosen and August Capital, is close to shutting down, according to WiFi NetNews and MuniWireless, two blogs that follow the MuniFi industry closely.

MetroFi is trying to sell its citywide Wi-Fi networks in Portland (Oregon), Aurora and Naperville (Illinois) and Santa Clara, Cupertino, Sunnyvale, Foster City and Concord (California). MetroFi founder, Chuck Haas, says he is also exploring the sale of MetroFi itself to a third party.

MetroFi had started to offer ad-supported wireless access in many cities, except it couldn’t find any traction. I think with all the noise Google made, even that company has backed away from WiFi-access based on advertising. There were a few others that have found going really tough when it comes to MuniFi. The trials and tribulations of EarthLink are well known by now. Glenn Fleishman blames EarthLink for the current spate of industry problems. And he’s not far off the mark, though I think the sector became a victim of its overambition.

EarthLink was in many ways largely responsible for the mess that all Wi-Fi providers found themselves in last year by offering to build Philadelphia’s network back in 2005 at no cost to the city—in fact, paying the city and the local utility fees. That set the stage for nearly all the RFPs that followed where, if EarthLink were a bidder or the city was aware of the alternatives, the notion was that no city dollars would be spent, even if taxpayer money wasn’t “at risk”—that is, even if a city could save money by switching current line items in their telecom and data budget to a wireless network.