Members of the New Orleans City Council raised concerns on Thursday over a proposal under consideration by Mayor LaToya Cantrell’s administration that would created a “city-directed” internet service to compete with existing providers like Cox Communications, while deploying thousands of new “smart cities” devices around the city equipped with cameras and other data collecting sensors.
The issue came up during the fourth day of council hearings on Cantrell’s proposed 2022 city budget. Employees from the Mayor’s Office of Utilities, which is leading the city internet effort, presented their 2022 plans to the council on Thursday.
Councilwoman Helena Moreno took the lead in questioning the director of the office, Jonathon Rhodes, over the internet and “smart cities” plan. She raised concerns over residents and businesses having to pay for subscriptions to the new service and the possibility that data on New Orleanians could be collected and “monetized” by the contractor building the systems.
“The whole point of this is that at the end of the day, this is for public benefit, not for someone to go get really rich off the backs of New Orleans,” Moreno said. “My real concern with the public WiFi is that it’s truly a free system, and one that is not going to intrude onto the users’ privacy and that we’re not mining out data. Those things are absolutely key.”
Moreno also questioned the city’s relationship with a “pro bono consultant” that helped bring the proposed project from a concept to a solicitation for prospective contractors. That consultant had a pre-existing relationship with one of the companies in the group that was later selected by a city purchasing selection committee as the top choice for the job.
Moreno asked whether the city, prior to issuing a request for proposals, was already negotiating with the group of companies that was ultimately chosen through the RFP process.
Since the onset of the coronavirus pandemic, both Cantrell and the City Council have been working to find ways to get internet access to those who can’t afford it. The “digital divide” has long been a problem in New Orleans, but the pandemic brought it into sharp focus when it forced remote work and education and shut down many of the communal places that previously provided internet access, like libraries and coffee shops.
The city set up a working group to deal with the issue that included both administration and council officials. But according to Moreno, that effort fizzled out, and the new proposal, which went out to bid in the spring, is being led by the Cantrell alone.
“We had a good working group,” Moreno said. “Out of nowhere, it just ended. And we stopped getting a lot of information.”
The Cantrell administration ended up releasing a request for proposals in April for a city internet and smart cities program. The city received five proposals in response. The highest-rated proposal came from Smart+Connected NOLA, a partnership between wireless giant Qualcomm, JLC Infrastructure, Jacobs Engineering Group and Zyter, along with 11 pre-selected subcontractors.
The Lens detailed that 240-page proposal earlier this week. Broadly, the plan would set up a city-wide internet service to achieve two primary goals — offer competitive internet subscriptions to residents and businesses and create a private network for the city to connect thousands of new “smart cities” devices.
Smart cities programs revolve around setting up various “smart” devices — like streetlights and traffic signals — that can collect and transmit massive amounts of data to improve city services and create a new revenue stream for the city. Smart cities programs have become increasingly popular in recent years, fueling what is now a multi-billion dollar industry, in part because companies often offer to implement them without any upfront taxpayer investment, in return for the ability to profit off of new advertising and data mining opportunities they create.
That’s exactly how the New Orleans proposal is supposed to work. Smart+Connected NOLA would invest somewhere between $50 million and $100 million in new infrastructure to create the system, Rhodes said. The city would have annual financial obligations, but those expenses would supposedly be covered by cost savings associated with the plan, including cutting the city’s existing internet service.
What Smart+Connected NOLA would get in return is the ability to monetize the data collected from the new smart devices, as well as subscription fees from customers who switch their internet provider to the new city service. Smart+Connected NOLA would split a portion of those revenues with the city, although it’s unclear how big a portion the city would get.
The upfront multi-million investment would include the installation of 3,000 smart streetlights, 500 smart traffic lights and 30 WiFi Kiosks. All of those devices would have at least one camera, as well as other sensors including microphones, raising concerns for local privacy advocates already concerned about the city’s expanding surveillance capabilities.
Marvin Arnold, an organizer with the local privacy group Eye on Surveillance, brought up several concerns with the proposal earlier this week.
“I pay a lot for unreliable and expensive internet in Central City,” he said. “This plan probably won’t improve the situation for me or my neighbor. Instead, the city is close to reaffirming its commitment to making public services contingent on New Orleans residents agreeing to more fines, more advertising, and more criminalization.”
In response to many of the council’s concerns on Thursday, Rhodes noted that the proposal is just that — a proposal. He said the city is now negotiating with Smart+Connected NOLA on a cooperative endeavor agreement that will set out the final terms of the arrangement.
“I think some of that is yet to be determined. The RFP was awarded, we’re in the process of negotiating a CEA. So I don’t have a definite number or even a definite plan of action because we haven’t finalized the CEA yet. It will of course have to come before the council, shortly I hope.”
Moreno said that in the process of working through that CEA, the administration needs to keep the council apprised. If the city opts to accept Smart+Connected NOLA’s proposal for a 15-year CEA, it will have to go to the City Council for a vote. City law requires council approval for multi-year CEAs.
“I just think there’s a lot of work that needs to be done with the council engaged on this,” she said.
Ignite Cities and Qualcomm
Moreno questioned Rhodes on the city’s relationship with Qualcomm and a Chicago-based consulting firm — working for free — that helped the city pursue a smart cities plan: Ignite Cities.
“I’d like to thank our partners at Ignite Cities, who have provided assistance to help New Orleans understand the power of the Smart City approach to digital equity,” Rhodes said in a press release announcing the Smart Cities RFP.
Moreno brought up a December 2020 article from an industry publication, Enterprise Insights, in which a Qualcomm executive said the company is “in talks with the City of New Orleans” on setting up a smart cities project. That was four months before the city’s RFP was officially released.
“So it looks like obviously someone’s been talking to Qualcomm for quite some time,” Moreno said.
She also noted that Ignite Cities, which gave the city free advice on developing the smart cities RFP, has an official partnership, announced in June 2020, with Qualcomm and JLC Infrastructure — two of the primary companies that make up Smart+Connected NOLA.
“The reason I brought up ignite cities is because Qualcomm is a partner of Ignite Cities, as is JLC,” Moreno said. “Both of them are partners and help with funding some of the programs for Ignite Cities. And I know that the city of New Orleans is very well featured on the Ignite cities website, there’s a whole page for our mayor… So I just wanted to understand fully that relationship and connection.”
Rhodes said that while Ignite Cities provided advice, “they did not draft any portion” of the RFP.
Cox, which also submitted a proposal for the smart cities RFP, is officially protesting the city’s decision to choose Smart+Connected NOLA.
Moreno also noted that the city already worked with Ignite Cities last year to deploy a pilot program to provide public WiFi in Hoffman Triangle. According to Rhodes, the technology “did not work well,” and the city decided they’d need to go with a different technology. Councilman Jay Banks, whose district includes Hoffman Triangle, interjected.
“Didn’t work well? It didn’t work at all.”
Cost to residents
Councilwoman Moreno raised concerns about how much residents and businesses will have to pay to access the new “city-directed” internet service, both in terms of cost and data privacy.
“We’ve always envisioned, when we talked about public WiFi, about it being free. Are we talking now about having to charge citizens?”
Rhodes responded by saying that a key priority of the plan was getting internet access to those who can’t afford it by providing subsidized subscriptions.
“Some free level is absolutely envisioned in this plan,” he said.
Although the proposal is 240 pages long, it doesn’t include many specific financial details. And until the city develops the CEA, no one can say for sure how exactly the program will work.
But based on the proposal and Rhodes’ statements, it doesn’t appear that subsidized subscriptions are automatically built into the plan. Rather, it appears that providing free or low cost subscriptions will hinge on the city’s ability to find the money to subsidize those accounts.
“In order to provide something for free, we have to pay for it somewhere,” Rhodes said. “So we had to find strategies that can help bring money to that. One of the other things we’ll look at is new federal funding coming out for broadband. So there may be ways to subsidize free or low cost broadband through that.”
Aside from the potential federal funding, the proposal suggests that the city could realize two new revenue streams from the plan. The first comes from subscription fees that residents and businesses will pay to access the service. The second comes from advertising and data mining monetization through the city’s new smart cities devices.
The 30 WiFi kiosks will bring in money by displaying advertisements on their mounted screens. Data collected from smart cities devices, particularly the smart traffic lights, will be packaged and sold to private companies. Smart+Connected NOLA would split those revenues with the city, and suggests in their proposal that the city could use those revenues to subsidize low-income internet subscriptions.
“One of the ways money could be made, which I do not agree with, is data mining,” Moreno said. “Next thing you know, your information is going to whoever’s providing the service and now they’re selling it to who knows who. That’s a real legitimate concern.”
Though there’s a reference to “city-wide data mining,” the Smart+Connected NOLA proposal does not mention the possibility of scraping data from personal devices. The data that is explicitly mentioned comes from the sensors sprinkled throughout the city, including the cameras.
Rhodes said that he agreed with Moreno’s concerns about privacy and data-mining, but he noted that to attract over $50 million of infrastructure investment, they needed to raise revenue somehow.
“We need to find ways to fund this into the long term. Because even if we receive money through an infrastructure bill at the federal level, that’s gonna get us the short term win of maybe deploying fiber, but how do we pay for that over the next 20, 30 years. So we do need to look at some strategies, in my opinion, to figure out ways to pay for it in the long term.”
He said that the city would be guided by the privacy laws that the City Council passed last year. Councilman Joe Giarrusso, however, noted that while the city’s new privacy laws include some data privacy rules, they were primarily related to the city’s use of crime cameras. He said there were privacy issues at hand that could go outside the scope of those laws.
“My concern is, there’s multiple layers of this when it comes to internet protection,” Giarrusso said. “I want to make sure when we’re talking about data mining, it’s maybe broader than whatever we have passed.”
Finally, Moreno brought up concerns with the proposed ownership structure. Under the proposal, the infrastructure to set up the new service would all be owned by Smart+Connected NOLA, rather than the city. After 15 years, the city would have the option to purchase it.
“You’ve got a city like Lafayette that owns their own [internet service]. If we go with this proposal, we’re not owning our system. They’re going to build it out and after 15 years of them deploying infrastructure, then we have the option of whether or not to buy it or not. So what happens if we can’t buy it?”
Rhodes noted that detail was only in the proposal, not the final agreement that will actually govern the program.
“It’s a little premature because we’re trying to negotiate that ownership and how it would work. Ownership for the city is absolutely part of our plan. The city needs to own its own critical infrastructure, it needs to build out its own broadband as well. … Since no CEA has been drafted or finalized, there’s no such agreement. In making an agreement we will absolutely look to the city’s ownership.”