Weprin, Council Concerned With City's Planned Pay Phone Wi-Fi Hubs [UPDATED]

Many New Yorkers are excited about the prospect of New York City turning its obsolete pay phones into wireless access points. City Councilman Mark Weprin is one of them—which is why, he says, he wants to ensure that the city's Department of Information Technology and Telecommunications (DoITT) is fostering a competitive process for handing out the contract to operate the pay phone hubs.

Weprin has drafted a letter to DoITT and Mayor Bill de Blasio voicing these concerns and requesting that DoITT withdraw its Request for Proposals to award a 15-year contract to a single franchise operator, writing that the decision would create "a monopoly with respect to subject services." Weprin said that 23 other Council members have signed on to the letter as well. 

Weprin believes that this monopoly would violate the federal Telecommunications Act passed in 1996, which called for a fair market by prohibiting one entity from providing any interstate or intrastate telecommunications service. The City Council reaffirmed this ruling when it passed AR 2309 and AR 191, both of which explicitly state that “franchises shall be non-exclusive.” The potential illegality of the pay phone RFP notwithstanding, Weprin said that the lack of competition would create a scenario in which the operator of the pay phones is not motivated to continually upgrade its services.

"I guess the goal is to try to make more money with it because [the city] can charge more for advertising space if they have a monopoly," Weprin said. "Otherwise, I don't know. To me, I thought the goal here was to create a utilitarian purpose for these payphone areas, now Wi-Fi stations, so people can use them to make their lives better and to find their way around the city and to enjoy the city. If you have a monopoly and persons making their money because of advertising, why do they ever have to upgrade whatever it is that they design?" 

A spokesman for DoITT clarified that while one franchise will be granted initially, it will be non-exclusive and the agency is amenable to opening up the bidding process again to account for advances in technology.

“We believe that a competitive process will generate the best proposals maximizing the benefits for the public, but we’re open to doing another solicitation in the future to account for changes in technology and the potential to provide additional services to New Yorkers," said Nick Sbordone, a DoITT spokesman. "Whereas only one franchise will be issued at this time, any franchise granted will be non-exclusive, and the RFP actively encourages partnerships or joint ventures among companies to combine expertise in diverse areas creating the best services and end-user experience for all.”

The debate between DoITT and the Council is a continuation of one that began during a joint oversight hearing on the pay phone RFP before Weprin's Subcommittee on Zoning and Franchises Committee on July 18.

Robert Scott Jr., a Washington, D.C.-based attorney and expert in communications law, testified that DoITT's RFP plan violates Section 253 of the Telecommunications Act, which preserves the authority of local governments "to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis." Scott added that the Federal Communications Commission classifies Wi-Fi as an "unlicensed" service available for use by any entity, yet DoITT's RFP imposes a licensing requirement "where federal law does not allow one."

DoITT's Assistant Commissioner Stanley Shor made the case for the RFP by touting the public benefits of the pay phone wireless hubs, including continuous Wi-Fi access throughout the five boroughs and the "avoidance of unnecessary sidewalk clutter" from multiple providers seeking access to the same advertising panel locations. Rebutting the argument that the winning franchise might rest on its laurels, Shor added that the Wi-Fi network scale would be sufficient enough to incentivize proposals for initial capital and ongoing investment to maximize the public benefit. 

Weprin, for his part, said he hopes DoITT makes good on its statement that the RFP process might be reopened. 

"Long term, it's better for the city to have multiple providers, multiple franchisees," he said. "I'd like them to pull back the RFP, or expand the RFP to include more than one. I'm not saying who, I'm not saying how many. More than one, so there is more competition."

As the Queens Times Ledger has reported, Weprin collected $750 in campaign contribitions from employees of Titan Outdoor LLC, a telecommunications company that has lobbied the city, and $500 from the CEO of Telebeam Communications, which issued a press release joining Weprin in railing against the plan to transform pay phones to Wi-Fi hubs as engendering a monopoly.

However, it is unclear if these companies have submitted proposals for operating the pay phone Wi-Fi hubs. DoITT Spokesman Sbordone said he could not comment on who submitted proposals because the procurement process is still underway.

"We're excited to have received a number of substantial proposals, which are now under review," Sbordone said.

The de Blasio administration has not yet received Weprin's letter, and has not weighed in on the procurement process for the pay phone plan. The mayor's office did not respond to a request for comment.

UPDATE: The Mayor's Office issued a statement reaffirming their support for the process they used to choose an operator for the pay phone Wi-Fi hubs:

“Mayor de Blasio shares Council Members' commitment in fostering a competitive bid process for selecting operators of our revamped public payphone hubs. We believe our path is the most effective way to offer New Yorkers the best proposal for a coherent, consistent, and efficient network of amenities for sidewalk users that matches the criteria we have outlined in our RFP. The City is currently reviewing the submissions we have received by the July 21 deadline, and we look forward to selecting an implementing partner that will increase access to broadband connectivity for New Yorkers across the five boroughs."