Hosting Mobile World Congress has done more than boost Barcelona’s economy: It’s made the city government fight for the right to connect.

There’s been no press release or fanfare about it yet, but Barcelona City Council is to launch a citywide WiFi network that will offer free access to the city’s 1.6 million inhabitants. Over the next two years, more than 500 hotspots will be installed.

This is the second time that Barcelona has attempted a free WiFi network. In 2004, the city clashed with CMT, Spain’s telecom regulator, over perceived infringement of competition rules. The bitter fight forced the city to close down the Sensefils (wireless in Catalan) network, which offered free access to a limited number of websites, and allowed inhabitants to get information about the city and conduct basic e-government transactions.

At the time, the city of Barcelona publicly stated that: “as long as Internet access is not considered a universal right but simply a market, we will face similar situations.”

But as Yankee Group has asserted in its research, municipalities have a critical role to play in realizing the Anywhere Network – irrespective of whether fixed, wireless or hybrid infrastructure is deployed. The problem is that central governments and regulators don’t always agree with municipalities on how proactive that role should be.

For Barcelona, detailed business model information is not yet available, but another surprise is the company that the city has chosen to partner with. Guess again if you thought Telefónica or ONO. The winner is BT.

This is a coup for BT, which is already building more than a dozen wireless cities in the UK (using WiFi and mesh technologies). The €3.9 million deal validates a strategy to replicate contracts internationally where it can demonstrate focused expertise.

There’s also an admittedly personal angle for Luis Alvarez, president of BT EMEA and Latin America: Barcelona and Madrid are traditional city rivals, and Alvarez is a native of Madrid, working for a foreign company that also does not own a wireless network.