Amid Privacy Concerns, NYC Approves Bid to Turn Payphones into Wifi Hotspots

New York City's ambitious plan to transform thousands of obsolete payphones into blazing fast free public wifi hotspots took a major step forward today, when the city announced the contract's winning bidder and provided details about the rollout.

City officials said Monday that when completed, the initiative will result in the largest, fastest network of free public wifi hotspots in the country. And they tried to tamp down fears among some privacy advocates that the new network could become a tool to track citizens as they move around the city.

A consortium called CityBridge, which consists of billboard advertising leader Titan Outdoor Communications, tech and design firm Control Group, and tech giant Qualcomm, has won the contract to create the new network, which it calls LinkNYC. If the city's Franchise Concession and Review Committee approves the contract, construction will begin in 2015, and the first of 10,000 kiosks spread across the five boroughs will be operational by the end of the year.

Titan is no stranger to controversy when it comes to user privacy. The company faced a mild uproar last month after a report emerged that it had placed beacons—which alert users to their proximity—in 500 payphone kiosks.

City officials promptly asked Titan to remove the beacons, despite the fact that many retailers throughout the city already use them. Advocates of beacons point out that the devices rely on Bluetooth technology and are only enabled when a user downloads an application that can communicate with them, and then opts in to receive messages.

Beacons send out radio signals that can be picked up by certain applications on your phone, and only if Bluetoooth is enabled and the user attempts to locate a nearby beacon. Any user who wants to avoid them can simply not turn on Bluetooth on their phone.

On Monday, CityBridge officials said the group "definitely" plans to consider the use of beacons in the future, and said that the public would be notified if and when they are activated in the kiosks.

New York City's free public wifi plan comes as cities around the country are racing to increase both the ubiquity and speeds of internet access for citizens. High speed internet access, many city leaders argue, can be a powerful tool for economic development, civic engagement, and increased opportunity for citizens.

The new kiosks will feature free 24/7 internet access with up to gigabit speeds, free phone calls to anywhere in the US, a touchscreen tablet interface running Android to access city services, free charging stations for mobile devices, and digital displays for advertising and public service announcements.

The new network, which will cost the consortium about $200 million to build, is expected to generate as much as $500 million in revenue for city coffers over the life of the 12-year contract. Officials said the network expects to derive revenue from digital billboards as well as online advertising. No taxpayer funds will be used.

City and consortium officials stressed that they've integrated robust privacy protections into the plan.

"This is not 'Minority Report,' where we're looking at individual users," said Colin O'Donnell, chief operating officer of Control Group. "We've worked with the city to build the most robust privacy policy of any free wifi network in the world, and we'll never share personally identifying information with any third party" for commercial purposes, he said.

"I think they learned a lot from the beacon controversy, and my sense is that the city is trying to be very focused and up-front about privacy issues," said Dana Spiegel, executive director of NYC Wireless, a non-profit advocacy group. "But it's worth noting that none of the privacy policies have been published yet, so the proof of the pudding is in the eating."

Although personally identifiable information won't be shared with marketers, city law enforcement authorities may request information about users from CityBridge, according to Bruce Regal, senior counsel for the New York City Law Department, and CityBridge will be legally obligated to comply. The city also plans to use the new hotspots to push out location-based alerts to citizens in the case of emergencies, or for other public information purposes.