See inside the proposal to create a ‘city-directed’ internet service to compete with Cox and AT&T

Mayor LaToya Cantrell’s administration is working to finalize the terms of a proposal to create a “city-directed” internet service to compete with existing providers like Cox and AT&T, while also making major changes to how the city runs its street lights and traffic signals.

Under the expansive initial proposal, the city’s new internet service would provide a baseline to connect thousands of new “smart cities” devices throughout New Orleans, like “smart street lights,” “smart traffic signals,” and WiFi kiosks, all of which are equipped with video cameras and other data collecting sensors. Those sensors would serve several purposes, including gathering information to improve city services, law enforcement, emergency response, traffic and parking enforcement and data mining for profit. 

If all goes to plan, the changes would be “cost neutral” for the city. But that isn’t guaranteed, and hinges on monetizing the massive new data sets collected by the “smart” technology, as well as convincing residents and businesses to switch their internet provider and pay for the city’s new service.

The Cantrell administration put out a request for proposals, or RFP, earlier this year for a public internet and “smart cities” program. The city received five proposals in response. Those were evaluated in June by a city selection committee. The highest-rated bidder was a group called Smart+Connected NOLA, a partnership between wireless giant Qualcomm, JLC Infrastructure, Jacobs Engineering Group and Zyter, along with 11 pre-selected subcontractors. 

Implementing a smart cities program often involves creating city-wide internet connectivity that can support a vast array of interconnected “smart devices” used to collect data from residents and infrastructure. Those devices can save on costs, improve services and pick up massive amounts of data that can be monetized and provide insight into city operations.

Cities have embraced smart cities, which has grown into a multi-billion-dollar industry in recent years, in part because companies often offer to implement them with no upfront charge to taxpayers, in exchange for the opportunity to profit off the new data mining and advertising opportunities.

The deal isn’t done yet. The city is still negotiating a cooperative endeavor agreement with Smart+Connected NOLA. Under city law, all multi-year CEAs must go to a City Council vote, so the group’s proposed 15-year agreement would require City Council approval. 

“The RFP only gave the respondent the opportunity to engage the City in a CEA for services,” Cantrell spokesman Beau Tidwell told The Lens last week. “We are currently negotiating the CEA and so no final agreement has been reached. At this time, it would be premature to announce a project since it is still being formulated.”

Tidwell noted that Cox Communications, which also submitted a proposal for the project, is formally protesting the purchasing committee’s selection of Smart+Connected NOLA.

One of the administration’s central justifications for issuing the RFP was the need to close the city’s digital divide by getting internet access to those who can’t afford it. But the new in-home internet service created under the proposal wouldn’t be free, at least for some subscribers. And while the proposal makes suggestions on how to eventually provide subsidized or free access, it isn’t clearly baked into the initial plan.

At an April press conference announcing the smart cities RFP, Jonathon Rhodes, director of the Mayor’s Office of Utilities, explained that the administration was focused on creating access to in-home internet, rather than just blanket outdoor WiFi.

“In addition to outdoor WiFi, which is what we commonly think about with public WiFi, we want to make sure we have in-unit, in-home connectivity. More than just your typical public WiFi, we want to make sure people have it in their homes, at their kitchen table, where they do their homework, where they do their work. And we want to make sure some level of that is free and/or affordable for all.”

The project could test the limits of a Louisiana law that places strict limits on local governments offering commercial internet service, although Tidwell said that anything the administration goes forward with will comply with the law.

The proposal also brings up many of the same privacy and surveillance concerns that have surrounded, and sometimes sunk, smart cities projects in New Orleans and other cities. 

In early 2020, the City Council considered adopting a smart cities pilot program that would add 146 “smart streetlights.”

But after opposition from local privacy group Eye on Surveillance, then-Councilman Jason Williams decided to put the plan on hold until the city could pass comprehensive local privacy laws. The council ended up passing a landmark privacy ordinance, but stopped well short of what advocates said was necessary to provide adequate ongoing oversight. The pilot program was never approved by the council.

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The current proposal is many times larger than the pilot, including 3,000 smart street lights. Smart + Connected NOLA’s financial plan, meanwhile, relies in part on using the new smart cities equipment to collect and monetize data. (The plan specifically mentions data collected by smart traffic lights.) Similar to smart cities projects in other cities, it’s unclear exactly what data will be collected and ultimately sold by Smart+Connected NOLA. 

Marvin Arnold, one of the organizers who fought the 2020 pilot program, has similar concerns now.

“I hope the City will also remember the earlier stance it took when considering the smart cities pilot in 2020. New Orleans must implement comprehensive guardrails that ensure data privacy, information security, and constitutional protections before any major projects that risk our personal liberties and identities are considered.”

After reviewing the proposal, Arnold criticized it for ramping up municipal surveillance and data collection without providing a clear explanation for how it will help close the city’s digital divide.

“I pay a lot for unreliable and expensive internet in Central City,” Arnold 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.”

Councilwoman Helena Moreno also saw potential issues in the proposal. Moreno chairs the council’s utility committee, which oversees issues related to telecommunications franchises.

“I’m very concerned about some aspects that have recently come to light about this potential agreement particularly around data mining and intend to zealously protect New Orleanians data privacy against any overreach,” Moreno told The Lens in an email. “Public WiFi in New Orleans is supposed to create a public benefit and therefore, strong safeguards must be put in place to guarantee that.”

Representatives from JLC, Jacobs and Qualcomm did not respond to requests for comment from The Lens.

Public WiFi 

At the broadest level, the new internet service would fulfill two primary functions — creating a private network for the city government and offering residents and businesses an alternative to Cox, AT&T or other internet providers.

“​​Providing an alternative connectivity option to the residents and businesses of New Orleans will have a positive effect, injecting competitive pricing into the market,” the proposal said. 

In terms of free internet connections, the new service would replace the WiFi currently used in city buildings, like libraries and recreational facilities — places that already offer free public WiFi access. The plan indicates that public internet access could be expanded to some new public facilities, including parks. And people will be able to access free service at one of the city’s 30 new WiFi kiosks.

Other than at those locations, it appears users will need a subscription to access the city’s new network. And while the proposal includes the general goal of making the service accessible for everyone, it doesn’t provide a comprehensive roadmap to achieve that. 

There are suggestions and partial solutions, however, including a promise from Smart+Connected NOLA to “introduce a program that pairs students and their families with subsidized internet access through completion of online education modules.”

The proposal also suggests that the city could use new revenues it realizes through the program — a portion of advertisement and internet subscription sales — to subsidize some customers.

“Smart+Connected NOLA looks forward to discussing various alternatives available to the city utilizing proceeds from the revenue share, such as providing free or heavily subsidized service levels for residents in underserved communities.”

But it doesn’t include an accounting of whether projected revenues will be enough to meet the need, or how much cheaper it would be to subsidize services through the new service rather than existing providers.

Another question surrounding the new internet service is whether it’s allowed under state law. 

Louisiana is one of several states that restrict the ability of cities to offer internet services to the public. The law, called the “The Local Government Fair Competition Act,” was passed in 2004 based on 2002 model legislation written by the conservative Americans Legislative Exchange Council. Critics of the law saw it as an industry-backed attempt to stop the city of Lafayette from going forward with a plan to provide a municipally run internet service. 

The law prohibits cities from providing commercial internet services unless several conditions are met, including a city-wide referendum. Lafayette was able to meet those obligations and fend off several lawsuits, and started connecting its first customers in 2009.

“Any programs carried out under the Smart City RFP will be in compliance with the Act,” Tidwell told The Lens.

Unlike the Lafayette internet service, the New Orleans version wouldn’t be directly owned by a government entity, at least for the first 15 years. Instead, the service would be “city-directed” but technically owned by Smart+Connected NOLA. At the end of the first 15 years, the city would have the option to purchase all the equipment associated with the network.

However, the state law also requires the same process for cities offering internet services indirectly, through a partnership, joint venture or any other method done “on behalf of the local government or for the benefit of the local government.”

At an April press conference, the city’s Chief Information Officer Kim LaGrue made the case that the primary motivation for the project is better connectivity for city infrastructure, equipment and new smart cities devices. The ability to provide competitive broadband is an additional benefit.

“Our goal is not to compete or become a service provider, but to improve the city’s infrastructure,” LaGrue said. “So if we could deliver services in some capacity that benefits the city through the infrastructure that we are building, we would be able to do so.”

Smart Cities 

In phase one of the plan (the only phase detailed in the proposal), the city would add several new smart cities technologies. First, the city would put “smart traffic light” technology at 500 intersections in the city, equipped with traffic monitoring cameras and other “sensors.”

The new traffic light equipment would 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 Zyter. 

“Zyter has developed several Smart Surveillance systems that employ cutting-edge detection technology to provide real-time analytics and streamline emergency responses. Through predictive policing technologies, heat mapping and facial recognition software, government partners can detect situations before they escalate and provide the real-time information that hastens response times.”

Facial recognition and predictive policing technologies were both banned by the City Council last year, although Councilman Jay Banks told The Lens earlier this year that he was working with the NOPD to potentially reverse the facial recognition ban. 

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 city would also add 3,000 new “smart street lights” that would vastly reduce energy consumption while improving maintenance quality. They would also act as nodes for the city’s new internet network. According to a diagram in the proposal, each streetlight would have at least 2 cameras, as well as a microphone and other undisclosed “sensors,” which could include everything from gunshot detection to air quality monitoring.

The third “smart” technology being introduced are kiosks that serve as WiFi hotspots and have interactive screens that display advertisements and city information. New Orleans’ kiosks will follow the model of New York City’s LinkNYC kiosks, the proposal said.

The proposal isn’t shy about the privacy concerns associated with the massive amounts of data collected by the new devices. In fact, at one point, the proposal suggests the city needs to increase its privacy standards in order “to provide the required security and privacy required for the City’s smart program.”

“For example, a traffic camera or phone location information near a medical clinic may capture identity information near a medical clinic may capture identity information of clients at that clinic,” the proposal said. “This could be subject to Health Insurance Portability and Accountability Act (HIPAA) rules, in addition to other identity-based information.”

The proposal details how the system will be protected from cyberattacks and unpermitted use by outside actors. What is less clear is how the city and Smart+Connected NOLA will use the data. Ultimately, it appears many of those decisions will be up to the city government.

“City of New Orleans Privacy Policy will be used and implemented for this effort,” it said.

The city’s 2020 privacy ordinance lays out some broad rules for data collection and use. But they aren’t detailed enough to know exactly what the city will do with all the new data.

Cost

As written, the program outlined by Smart + Connected NOLA would not be free to the city. Rather, it would be cost-neutral. The city won’t have to provide any upfront investment. And its annual financial obligations are designed so they can be covered by savings and new revenues derived from the project. 

The project “should not impose any additional financial obligations to the City,” the proposal said.

It’s unclear how much private upfront investment Smart+Connected NOLA is offering, but when the city announced the RFP, Rhodes, from the Mayor’s Office of Utilities, said they were looking for $20 million to $50 million in outside investment. 

The proposal doesn’t include complete financial information, so the actual amount the city will owe every year is unclear. We do know that 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 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.

Those only represent first year costs before inflation or the “escalation” that’s built into a 15-year payment plan. The details of that escalation aren’t included in the proposal.

The city would also get a portion of the money raised by advertising on WiFi kiosks, adding broadband customers and selling data collected by the smart traffic lights. It’s unclear how large those revenue streams will be, or how large the city’s portion is. 

This story has been updated with a statement from Councilwoman Helena Moreno

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