Last week we noted that New Orleans became the first major city to launch a free and open wireless broadband network. We concluded that Telcos, Internet Service Providers and municipalities would be watching closely.

No kidding. Mayor Nagin announced the launch Tuesday morning and, according to a Washington Post story, New Orleans Homeland Security director Terry Ebbert got a call from BellSouth’s Lousiana operating chief Bill Oliver Tuesday afternoon. The call fell somewhat short of congratulations. City officials say Mr. Oliver angrily withdrew BellSouth’s offer to donate one of it’s damaged buildings to house the New Orleans Police Department.

The Post noted that, nationwide, telephone companies have lobbied aggressively against just the sort of networks New Orleans now has in place, arguing they are taxpayer-funded competition. Their efforts have succeeded to the extent that some states have laws prohibiting publically owned internet services.

New Orleans officials last week positioned the network as a means of facilitating and accelerating the return of businesses and residents to the flood-pillaged city.

The city’s CTO Greg Meffert is reportedly saddened by BellSouth’s objection: "It’s a once-in-a-century opportunity to truly show the entire world what can be, instead of just what is, and help write future history in the process," Meffert said. "It’s a damn shame they don’t see that."

The uproar may be more tantrum than intent from BellSouth, whose spokesman Jeff Battcher said, "Our willingness to work with the mayor and the city is still on the table."

The question is, will there be enough money on the table to keep all the stakeholders engaged in rebuilding America’s Atlantis?