Last week, NBA legend Earvin “Magic” Johnson appeared in New Orleans with Mayor LaToya Cantrell at three events entitled “WiFi for All.” Johnson was in town to promote a proposed multimillion-dollar deal that, among other initiatives, would create a “city-directed” but privately owned internet provider to compete with Cox Communications and AT&T.
Johnson isn’t just a celebrity spokesperson. He’s a partner in the deal. Last year, Smart+Connected NOLA, a consortium of companies led by wireless giant Qualcomm and JLC Infrastructure — a firm founded by Johnson and Chicago investment banker James Reynolds — submitted the winning bid on a “smart cities” project proposed by the Cantrell administration.
Along with the internet service, the group’s proposal also includes the installation of thousands of “smart” devices around New Orleans, like streetlights and traffic signals, that would be used to boost city data collection and potentially create a new revenue stream for city government.
It isn’t a done deal yet. Smart+Connected NOLA is proposing a multiyear agreement with the city, which requires City Council approval. But nearly a year after the city selected the group as the top bidder, a draft of the contract has not been released to the public. Neither have key details about the plan, like how much the city will have to pay or how the project will actually expand internet access to those who can’t currently afford it.
At least one council member has apparently been left in the dark as well. In an interview, City Council President Helena Moreno told The Lens that she can’t evaluate the merits of the deal, given the Cantrell administration’s unwillingness or inability to explain to her how the project will work.
“I have zero information,” Moreno told The Lens on Monday. “I’ve been told nothing.”
At the events last Friday, Cantrell, Johnson and Reynolds all urged the Council and public to get on board, despite the lack of detail.
“As Magic said, the New Orleans City Council has to be a partner in this as well,” Cantrell said at the Joe W. Brown Park rec center. “It’s a window, and it’s a window that will close. We do not want that window to go on us.”
“We could have taken our check anywhere, because a lot of cities want this,” Johnson said during a press conference the same day. “There’s no magic without the City Council. There’s no magic without the people saying, ‘This is what we want; this is what we deserve.’ ”
‘It’s raised red flags from the beginning’
Almost everything the public knows about the plan is contained in the lengthy, but detail-scarce, proposal that Smart+Connected NOLA submitted to the city last year. That document gives some insight into the broad goals of the plan, but lacks vital financial details and a clear explanation of the services it will ultimately provide.
The Cantrell administration has always sold the project as a way to reduce the city’s “digital divide” by providing in-home WiFi to households that currently lack it. But the internet service described in the initial proposal is a paid subscription service, without any mention of a built-in mechanism for subsidized or free service for low-income residents. And the city has not stepped up to help explain how this project will make a dent in that digital divide.
“This might be the best thing coming to the city of New Orleans, it may be something amazing,” Moreno said. “But I don’t know, because I haven’t been provided the information.”
Moreno and local privacy advocates with the Eye on Surveillance Coalition have also voiced concerns regarding the proposal’s calls to expand city data mining to sell for extra revenue. Moreno said she still needed more information on how the project would protect residents from undue privacy intrusion and other abuses.
“These are all questions that have never been answered,” Moreno said. “It’s raised red flags from the beginning, and now it’s gone on so long and still these questions aren’t answered. That’s just weird.”
The Lens has been unable to get detailed answers about the proposal despite months of requests. Moreno hasn’t been much more successful. She said she met with administration officials in December about the plan after she publicly raised concerns the month before. But according to Moreno, the administration still couldn’t answer basic questions about cost, privacy protections for residents and what services the project will actually provide.
“They said, ‘We haven’t worked all that out,’ “ Moreno said.
Moreno said she hasn’t gotten any information from the administration since that meeting or seen any draft contract.
On top of the cost and privacy concerns, Moreno also remains worried about contract-fixing allegations that were lodged against the city by the second-place bidder for the contract: Cox Communications.
“I think there are some potential ethics problems here,” she said.
The allegations, which were formally dismissed by city officials, revolve around a “pro-bono” consultant called Ignite Cities that helped write the bid solicitation — called a request for proposals, or RFP — that Smart+Connected NOLA won.
Ignite Cities isn’t listed as an official member of the consortium, but has previously announced partnerships with the consortium’s two leading members: Qualcomm and JLC.
Ignite Cities’ founder, George Burciaga, was at both of last week’s events. And Cantrell posted a photo on her official Facebook page this week ago showing her, Burciaga, Johnson and another administration official together in a wine cellar.
“I’m not leaving any comments or anything like that,” Burciaga told The Lens after one of the events last week. “I’m here supporting New Orleans.”
While Moreno is highly skeptical of the project, it isn’t entirely clear where the city’s other six council members stand. None responded to requests for comment from The Lens. But District E Councilman Oliver Thomas appears to be supportive. He was at one of last week’s events at Joe W. Brown Park, and spoke positively about the project.
“I know that I have a partner and a friend in your councilman, for sure, in District E,” Cantrell said.
District C Councilman Freddie King and District D Councilman Eugene Green attended another event at the Abundant Life Tabernacle on Franklin Avenue, which sits near the border of their two districts. Neither spoke publicly about the plan, however.
Moreno said that everyone on the council supports the goal of providing subsidized or free WiFi to those who can’t currently afford it. But, she said, the missing details make it hard to know if this project will achieve that.
“There’s broad support on the council that we want to bridge this gap. We would like to have WiFi for all. But the devil’s always in the details,” Moreno said. “It’s just, how do we do it and how do we make sure it’s right, it’s fair and we’re not giving away the farm.
The mood at both of last week’s events was largely celebratory. The crowds were clearly excited to see the NBA Hall of Famer and by the big promises he and the Cantrell administration were making. Cantrell and other stakeholders also celebrated the potential partnership between a Black mayor in a majority Black city with JLC Infrastructure, a large investment firm founded by Johnson and Reynolds, who are both Black.
But underneath that celebratory tone was a warning to the council: any infighting or delays could make the project disappear.
“Now when the Mayor says capital [investment] doesn’t follow dysfunction, it actually doesn’t,” Reynolds said at an appearance. “If this is a little bit too sticky and a little bit too messy, investors don’t come.”
WiFi for All?
The majority of the three Friday events was dedicated to discussing the city’s digital divide. Officials repeatedly pointed to statistics the city has cited since 2017 — that 23 to 33 percent of New Orleans households lack in-home internet, including 66 percent of low income households.
“You deserve better as a community, as a city,” Johnson said. “When that broadband comes it’s going to change all of your lives, it’s going to make it better.”
The speakers did not explain, however, exactly how this potential project would help fix the problem.
Broadly, the consortium’s initial proposal calls for building out tens of millions of dollars of broadband infrastructure throughout the city. The network would have two central purposes. First, it would provide a private city network the government would use to run city infrastructure and “smart cities” devices, like “smart street lights” and “smart traffic lights.”
Second, the broadband network would offer a commercial subscription service to residents. The network would provide “90 percent broadband coverage across the city’s 75-square-mile area,” according to the proposal. The actual size of New Orleans is 350 square miles, making it unclear exactly how much of the city will have access to the service. The proposal notes it would only cover 70 percent of Sewerage and Water Board facilities.
The internet service would be built on 4G and 5G cellular networks, rather than the fiber-optic and cable based internet services currently offered by Cox and AT&T.
Based on the proposal, it appears the service will be a paid subscription, and there don’t appear to be any specific plans for discounts for low-income households. There is also no information about whether the service’s baseline price will be cheaper than existing commercial subscriptions.
The proposal does include a revenue share agreement that would give the city a portion of the money collected from subscriptions to the new commercial internet service, as well as advertisements and data mining through the new smart cities devices. The proposal suggests the city could then choose to use those extra revenues to subsidize internet services to low-income residents.
But in the proposal, that is only a suggestion to the city, rather than a built-in part of the plan. In addition, there is no guarantee the project will generate enough revenue or produce enough savings to subsidize internet service for thousands of residents. And the city has yet to confirm whether they’ve even agreed to that suggestion.
On Friday, the only public WiFi mentioned was that the project would begin by installing internet at three city recreation centers as a test run — Joe W. Brown, Milne and Treme. All three of those buildings already have WiFi that can be accessed by the public, according to employees at those three centers.
The Lens asked Cantrell after one of the events last week how exactly the project would lower the digital divide, and whether the city was going forward with the plan outlined in the proposal to use the new revenues to subsidize subscriptions.
“No, that’s a portion of it, but it will be expanded,” she said. “Once we have the infrastructure in place and the fiber, that would attract even companies coming here and where the city would gain revenue from them utilizing our infrastructure. Most like when you have franchise [fee] agreements and the like.”
Cantrell’s spokesperson cut off the interview after that and didn’t allow for any follow up questions. She said she would answer the remaining questions after the event. But the city did not respond to The Lens’ questions and multiple requests for clarification.
Moreno said that she still doesn’t understand how the plan will impact the city’s digital divide.
“I don’t understand at all whether ‘WiFi for All’ means free, or are we now talking about a fee, or different levels. It could be any of those things. But I have no clue what it means.”
She said that prior to the smart cities RFP, the council was already looking into how to get more in-home WiFi access.
“What the council was interested in was some kind of free modem, something you could bring home and therefore provide you WiFi within your home,” she said.
Moreno said she was part of a working group with the Cantrell administration to try and find solutions for the digital divide. But about a year ago, she stopped getting invited.
“Then we got kicked out of the working group. The invites stopped coming. This was about a year ago, we just got completely cut out of the process.”
What will the project actually do?
The initial proposal is broad, suggesting a partnership that would touch everything from broadband services to streetlights to policing to flood mitigation. And now that proposal has been subject to months of negotiations with the city. So it’s hard to know, in the absence of a draft contract, what the project actually entails.
Moreno said she struggles to describe exactly what the project entails when people ask.
But the two aspects of the plan the Cantrell administration seemed most excited about last week were adding new smart cities technologies and building baseline infrastructure that could attract new businesses to the city in the future.
Smart cities technologies are growing in popularity around the world. At the broadest level, smart cities technologies seek to connect city infrastructure, like streetlights and trash cans, to the internet so they can collect and transmit data that can be used to improve city services or sold off for extra revenue.
To start, the New Orleans proposal suggests adding 3,000 smart street lights, 500 smart traffic lights and 30 new WiFi kiosks.
The new traffic light equipment would be equipped with cameras and other “sensors” to collect massive amounts of data that could help the city better manage traffic. The data would also be packaged and sold to private buyers, like rideshare and insurance companies, the proposal said.
The cameras would also help with law enforcement efforts by feeding footage and data to powerful analytic software, including some created by software company Zyter.
“Zyter has developed several Smart Surveillance systems that employ cutting-edge detection technology to provide real-time analytics and streamline emergency responses,” the proposal said. “Through predictive policing technologies, heat mapping and facial recognition software, government partners can detect situations before they escalate.”
The proposal indicates that the new equipment will be able to provide “blacklisted vehicle tracking alerts” and help with “traffic rules enforcement: red lights and speeding.” It also indicates the cameras could be used for parking enforcement and “integrated fine management.”
The smart streetlights include cameras, a microphone, and other data-collecting sensors. The proposal said the streetlights will greatly reduce energy costs by using LED bulbs and giving the city more control over their brightness and when they turn on. It also claims they will reduce outages by giving immediate notifications to the city when a streetlight goes out.
Residents have complained in recent months about streetlight outages, but it’s unclear if the new outage notifications would help. The city already has a long list of backlogged streetlight outages, some of which have been out for more than a year.
The WiFi kiosks, meanwhile, will serve as public WiFi access points. The kiosks will have screens that can display city information as well as ads to raise revenue.
All of these “smart” devices require an internet connection, which is why the plan includes building out a broadband network for the city to use. Cantrell and other officials also said that building out this broadband infrastructure would invite more investment to the city. Josh Cox, Cantrell’s director of strategic initiatives, said that “putting infrastructure into the ground so we can attract businesses of the future.”
“What it allows us to do is, partnerships bring more partnerships bring more partnerships,” Cantrell said.
It isn’t entirely clear what businesses they are referring to or why this new infrastructure is necessary to attract them.
What will it cost?
One reason smart cities projects have become so popular in recent years is that companies will often offer to make big upfront investments without forcing city governments to pay anything upfront.
The New Orleans project, which includes tens of millions of dollars in upfront infrastructure spending, is being pitched as “cost-neutral” for the city. The city won’t have to contribute to the upfront investment, and the annual payments are designed to match the money the city would save by cutting unnecessary maintenance contracts and reducing energy consumption.
The actual amount the city will owe every year is unclear. The proposal lacks comprehensive financial information, but it says the city will pay at least $3 million a year, which the proposal assumes will be taken from savings. That includes $360,000 a year for severing the city’s existing WiFi service, $720,000 for saved energy and maintenance costs on street lights and $2 million for saved operations costs on traffic lights at 500 intersections.
The costs will only increase to match inflation and the “escalation” that’s built into the 15-year payment plan.
The city also stands to gain new funds through a revenue share agreement with the consortium that would give it a piece of the money brought in by new subscriptions, advertisements and data mining. But exactly what that revenue share agreement looks like, and how much the city expects to gain, is unknown.
“This could be great, but I think people need to be armed with information,” Moreno said.