According to the New York Times, Google is waving off rumors it will expand its free Wi-Fi initiative from its home area in California to a nationwide program. Google will open in Silicon Valley wi-fi up formally today, and is being asked by San Francisco to partner with Earthlink to run a similar free network in the city.

Google's Chris Sacca said in an interview that the company was rolling out local wi-fi in a few areas to enable businesses in those areas to experiment with new applications (probably something like location-based advertising). So far it has mounted 380 wi-fi access points to lampposts around Mountain View, California to runs its initial pilot. Users need repeaters in their homes or offices to use the service. The report said Google has spent $1 million on this pilot.

Here's hoping its just a smoke screen. Current wi-fi networks are so sparse and disconnected in this country and others that deploying new services and applications over them to add to the value of being wi-fi enabled is impossible. Operators are keen to keep it that way and focus service on "profitable" islands. Now with wi-fi VOIP on the horizon in some devices, they have no incentive to let these islands expand to enable customers to dump their cellular services for wi-fi.