disconnect

City Hall May Pull Plug on LinkNYC Owner Over Missing Kiosks — and $75M Owed

A LinkNYC terminal in Manhattan, Dec. 5, 2019.
A LinkNYC terminal in Manhattan, Dec. 5, 2019. Photo: Ben Fractenberg/THE CITY

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A tech consortium brought in by the de Blasio administration hasn’t installed hundreds of promised public Wi-Fi kiosks since fall 2018 and owes the city nearly $75 million, the city’s top tech official testified during a City Council hearing Tuesday.

What wasn’t mentioned at the hearing is that city officials are considering terminating their contract with the group that runs LinkNYC — and allowing its lenders to take over the operation, according to a high-ranking source at the Department of Information Technology & Telecommunications (DoITT).

“We are prepared to exercise every right under the franchise agreement,” DoITT Commissioner Jessica Tisch told the Council’s Committees on Land Use and Technology.

“What we have is a contract,” she added. “One of the means is to pursue enforcement. Our patience is up.”

The LinkNYC consortium, known as CityBridge, paid the city just $2.6 million of $32.3 million owed in fiscal year 2019, Tisch told the committee. It has given zero of $43.7 million owed in the current fiscal year ending in June, she added.

Over the past 18 months, CityBridge has reported $105 million in ad revenue tied to LinkNYC, she testified.

The consortium, which includes Intersection, an advertising firm partly funded by Google’s parent company, is “crying poverty,” Tisch said.

“That’s absurd!” said City Councilmember Robert Holden (D-Queens), who chairs the Committee on Technology. “New Yorkers are being shortchanged.”

Promises Not Kept

In 2014, CityBridge signed a franchise agreement that said it would install 7,500 operational kiosks within a decade.

But the company has installed just 1,816 of the 2,353 kiosks that were supposed to be up and running by July 2019, according to the city’s Preliminary Mayor’s Management Report.

“We have not gotten CityBridge to make any progress,” Tisch said, noting the majority of those 537 kiosks yet to be activated “are in underserved areas in boroughs other than Manhattan.”

DoITT Commissioner Jessica Tisch testifies at City Council on March 3, 2020.
DoITT Commissioner Jessica Tisch testifies at City Council on March 3, 2020. Photo: Ben Fractenberg/THE CITY

“New Yorkers who would benefit most from this service are not getting it … because CityBridge is delinquent,” she said.

Tisch’s testimony came a month after THE CITY reported that dozens of LinkNYC kiosks, including some installed as far back as 2017, have not been activated.

A CityBridge spokesperson said unexpected infrastructure issues have created the ongoing problems.

“What DoITT presented at the City Council was a fictional narrative that ignores the City’s responsibility for the current state of affairs,” said the spokesperson, Dan Levitan.

“While the public’s use of LinkNYC’s free services has far exceeded expectations, installing Links has proven more difficult and costly than expected, largely due to the city’s own rules and bureaucracy,” he added.

In 2016, LinkNYC’s then-general manager, Jen Hensley, told the Committee on Technology that restrictions imposed by Verizon, which controls access to the underground conduit of fiber optic cables the kiosks connect to, impeded kiosk installations in parts of the city.

‘No Patience’

On Tuesday, Tisch said she was tired of excuses.

“The time for talking about obstacles is up,” she said, noting the city renegotiated the franchise agreement in 2018 to give CityBridge more time.

“I believe the city has bent over backwards to amend the franchise agreement,” she said. “I can’t speak for them why they haven’t paid. I have no patience for it.”

The city fined CityBridge $142,000 for kiosks’ phones and phone components that weren’t working or maintained in the last two fiscal years.

CityBridge also owes DoITT $1 million in liquidated damages for failing to deploy kiosks.

The CityBridge consortium includes Qualcomm, a telecommunications equipment company; Intersection; and CIVIQ, which specializes in “smart cities” planning.

When it landed the franchise contract from the city, CityBridge promised the kiosks would offer the public free Wi-Fi, domestic phone calls and a tablet touchscreen that could connect users to various services via 311.

Officials said the kiosks would be paid for by revenue from the advertisements on them while bringing in $500 million for the city over the span of the contract, which was initially 12 years.

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