Microsoft and MetroFi announced a partnership Wednesday to blanket the city of Portland, Ore. with free wireless Internet access. The service would be advertiser supported, and make use of the Redmond company's adCenter platform to attract advertisers and help target their ads.

Service would be initially launched in Pioneer Courthouse Square later this year. When the project is completed, about 95 percent of the city would have Wi-Fi access. Speeds of 1Mbps downstream and 256Kbps upstream would be provided.

MetroFi currently operates networks in Foster City, Cupertino, Santa Clara, Sunnyvale, downtown San Jose, and Concord, Calif., however Portland would be the company's largest Wi-Fi project to date. Transmitters would be placed on street light poles within the city.

"Microsoft's support of the Portland network further reinforces the validity of advertising-supported municipal Wi-Fi," MetroFi CEO and co-founder Chuck Hass said. "We're confident that consumers will appreciate the added value of Microsoft's locally relevant MSN content and services."

GigaOM's Katie Fehrenbacher said that the Microsoft partnership is a big deal for MetroFi. "Signing up Microsoft is a substantial win for the small startup that has raised $15 million to date - which isn't that much considering it's building and running large networks," she said.

"It's also a good sign for the ad-supported Wi-Fi model, which has been viewed with considerable skepticism," Fehrenbacher continued.