In my last post I described Boston’s recently-launched Wicked Free Wi-Fi as a new generation of municipal wireless networks likely to be more successful than the first generation of projects launched a decade earlier.
Another member of this new generation is LinkNYC, a recently announced Wi-Fi network that will be deployed in New York City starting later this year. While they have some things in common (i.e., a focus on free outdoor nomadic service), the NYC project is, in key respects, different, more ambitious and perhaps more controversial than Boston’s Wicked Free.
As Matthew Flamm put it in the lead paragraph of a piece in Crain’s New York Business:
[Note: as explained below, the gigabit speed is per kiosk, and would be shared by all users accessing the kiosk it at any given time].
Gigabit Internet is finally coming to New York City, and from the unlikeliest of sources: the city’s pay-phone network. And even more remarkable, the service—and all U.S. phone calls on these new Wi-Fi kiosks—will be free
The project’s media kit explains the kiosks, known as “Links” this way:
Links are iconically designed connection points that house state-of-the-art wireless technology, interactive systems and digital advertising displays, which will offer 24/7 free Internet access at up to gigabit speeds…as well as a range of other services including free phone calls to anywhere in the U.S., a touchscreen tablet interface to access City services, wayfinding, 911 and 311 calls, free charging stations and digital displays for advertising and public service announcements.
That’s a lot of free services in exchange for a new layer of high-tech display advertising (see example above) in a city that’s already pretty saturated with display ads.
And, instead of costing NYC taxpapers money, the project aims to generate revenue for the city. According to the media kit, the project “will be funded through advertising revenues, will be built at no cost to taxpayers and will generate more than $500 million in revenue for the City over the next 12 years.” And, according to Flamm, “[t]he contract…guarantees payment of $20 million in advertising revenue to the city in the first year of operation.”
The project is being undertaken by a for-profit consortium of four companies. As Kif Leswing explains at GigaOm:
CityBridge is a partnership between four companies: Titan, the New York display advertising giant; Comark, which will be fabricating the actual kiosks; Control Group, which is providing most of the strategy for the concern; and chipmaker Qualcomm. They all own about a quarter of the partnership, which entered into a 12-year, $200 million contract with New York City to build and administer Links.
Transit Wireless, currently providing wireless technology for NYC’s underground subway stations through a partnership with the Metropolitan Transportation Authority (MTA), and Antenna Design, which specializes in people-centered industrial design, will also be involved in the LinkNYC project. The former will support the network’s fiber infrastructure, while the latter will design the Link kiosks.
As to the timetable, Flamm reports that:
[I]t won’t be until late 2015 before the first 500-plus units are installed, according to Stanley Shor, assistant commissioner at the Department of Information Technology and Telecommunications, which administers the franchise. CityBridge has four years to complete installation of the first 4,000 structures. The RFP called for eventual construction of 10,000.
Each link will supply a Wi-Fi network within a 150-foot radius…[and] must be capable of supporting up to 256 devices with a total aggregate throughput of 1Gbps” and “simultaneous dual spectrum 2.4 GHz 802.11 b/g/n, and 5GHz a/n/ac services.” So if you’re the only one connected to a Link, you might be able to pull down gigabit speeds.
Plus, there’s a requirement…for CityBridge to upgrade its Link design every four years…to stave off obsolescence…[and] there’s a pilot program planned in the Bronx for a partially solar-powered Link that might be incorporated into the next design.
Advertising is at the heart of the project’s revenue model and economic viability. As Leswing notes “CityBridge won’t be able to introduce a new premium tier of service later,…so it will have to make its money through advertising.”
“Major brands will flock to advertise on the LinkNYC network because the structures look beautiful,” Dave Etherington, chief strategy officer at Titan said. “This also means they could customize their message from Link to Link.”
Lots of endorsements, but also some concerns
About a month after the project was announced, the Mayor’s Office issued a press release containing roughly four dozen endoresements from a range of community leaders, activists and experts.
But, as one might expect from something this ambitious and, in key respects, unprecedented, the project has also raised some concerns.
For example, a WSJ piece by Mike Vallensky reports that the LinkNYC plan “is raising concerns among cybersecurity experts and elected officials.”
“If [city officials] are not extraordinarily careful, they’re opening up Pandora’s box,” said Timothy P. Ryan, managing director of cyber-investigations at Kroll, a Manhattan-based risk-management firm…
The mayor’s office said the citywide Wi-Fi network could be a safe way for New Yorkers across the boroughs to access the Internet. “It’s potentially more secure than what people have at home—if they’re not technical people, and not thinking about security,” said Minerva Tantoco, the city’s chief technology officer…
City officials said data passing through the network will be protected by encryption. The network, which will only be accessible to users with a name and password, will also block people from exchanging files and data through the network with other users, they said…
Shane Buckley, chief executive of Xirrus, a private Wi-Fi company based in Thousand Oaks, Calif., said he needs convincing. “Top Wall Street banks are getting hacked,” he said. “Can the municipal government protect a public network as securely as those folks?”
Leswing points to another controversy related to the LinkNYC contract:
[Since] CityBridge’s contract runs for twelve years (plus a city option to extend it to fifteen years)…during that period, it might not be possible for other vendors to build Links with their own technology on city property — giving CityBridge an effective monopoly on city-furnished Wi-Fi for over a decade. The companies most affected are pay phone operators.
“At present, with this decision to award the entire contract to one company, the City ignores the law and precedent as set forth by Congress, the President and the Supreme Court, calling for open competition in the American way,” Lester Shafran, Director of the Independent Payphone of New York said. “Winner takes all leads to many losers.”
And though it is central to the project’s “free access” business model, LinkNYC’s reliance on advertising has also attracted some criticism, as reflected in a piece by Christopher Zara in the International Business Times:
Rule No. 1 in the “Culture of Free”: There’s always a catch. New York City officials last week announced an expansive plan to replace pay phones (remember them?) with high-tech kiosks that offer free Wi-Fi to anyone in the city. But the term “free” is a bit of a misnomer. Just like with Facebook, Google, Twitter or any number of modern-day necessities, users will pay in the end — with their eyeballs and their data.
First the eyeballs: The plan, dubbed LinkNYC, will see the creation of 7,500 structures scattered throughout all five boroughs. Eighty percent of those structures will have advertising displays of up to 1,539 square inches — that’s more than 9 million square inches of new ad space vying for pedestrians’ attention… But unlike much of the outdoor advertising New Yorkers are used to seeing, the kiosk ads won’t be static; the screens will be able to deliver targeted messages based on a host of data sets, such as what time of day it is or how many people are in a given area…
Perhaps more important, the free Wi-Fi network will generate a trove of monetizable data about what people are doing on the streets of one the world’s most cosmopolitan metropolises: their whereabouts, devices, browsing habits, search habits, scrolling behaviors. It’s all up for grabs, available to the company — or in this case companies — willing to bear the cost of building the infrastructure…
Another concern that’s been raised relates to the digital divide. As Leswing reports:
One of the controversies surrounding LinkNYC when it was announced that CityBridge had won the contract was whether all Links would be outfitted with gigabit connections, which requires a fiber optic connection. Some alleged that poorer neighborhoods in the outer boroughs would get stuck with weaker connections — still rated for 100Mbps, easily surpassing the FCC’s new broadband definition — where ritzy neighborhoods would get the gigabit speeds. In response, CityBridge clarified that the value of a Link’s advertisements wouldn’t have anything to do with the speeds, and that 95 percent of Links would support gigabit speeds, based on fiber availability.
Impressively, all but 150 of the 4,000 Links that will be installed over the first four years of the proposed contract will be providing superfast, gigabit Wi-Fi Internet access-up to 100 times faster than average municipal Wi-Fi and 20 times faster than the city’s average home Internet access service.
It’s true that most of those Links — about 2,600 of them — will be in Manhattan. They are replacing existing payphones that already have advertising panels, most of them in Manhattan. But there will be many hundreds in the other boroughs: more than 500 in Brooklyn, about 240 in the Bronx, about 630 in Queens. Staten Island will get the non-gigabit Links, but even they will offer speeds that are twice as fast — for free — as those now available at high prices to Staten Island residents in their homes.
Not good enough, critics cry.
But in order to carry out the LinkNYC plan without city funds, New York had to work with what it had. Those constraints included the existing network of payphones, the wires to which they were already attached and the willingness of a vendor to build out the network. Blocking it on the theory that it doesn’t solve the entire problem would take the city back to supporting mouldering payphones. Which would be dumb.
Crawford’s piece also mentions something else that caught my attention:
Without a new authorizing resolution from the City Council, one key potential source of revenue for the vendor — a “small cell” system that would shake up the market for expensive mobile data now dominated by Verizon and AT&T in New York City — wasn’t available. And so the city felt it had to allow the vendor to fund the plan through advertising at the superfast hotspots (with the city getting a large share of that revenue).
I assume Crawford is referring here to the possibility that LinkNYC kiosks could generate revenue by supporting small-cell coverage service provided by multiple competing wireless providers. Though that option was apparently not pursued, her comment about “shaking up” the NYC market for “expensive mobile data” remains relevant to the model the city did decide to pursue.
Assuming LinkNYC works roughly the way it is envisioned, it raises the question of how many of NYC’s millions of mobile users will, over time, decide to cancel or downgrade their cellular plans. A related question is how carriers will respond to the widespread availability of free and very fast Wi-Fi service (and the network’s other free services) on the pedestrian- and mobile device-filled streets of New York.
Another set of questions relates to whether the project can realize its ambitious ad revenue and technical performance goals. If it does (or even gets close), this raises additional questions about whether and how the LinkNYC model can be adapted to work in other cities and, if it can, what that means for the future evolution of the communications sector.
Perhaps the most interesting and important set of questions tied to this project relate to how it will impact the near- and long-term quality of life for people who live, work and visit the Big Apple. As someone born in the Bronx and raised in the NYC metro area (and briefly and long-ago a city employee), it’s good to see such a creative, ambitious and potentially important project being launched by New York’s new mayor. I hope it succeeds and, if and when it stumbles, yields lessons that lead to further refinements and progress.