The City of New York has issued a request for proposals to replace its aging payphone network with a citywide network of public communications hubs offering phone services as well as free Wi-Fi. The communications hubs will have the potential to offer new services such as pay-per-use cellphone charging stations and touchscreens that provide city information, digital advertising and business transactions.
“By replacing the aging network of public payphones with state-of-the-art public connection points, the City aims to transform the physical streetscape — and New Yorkers’ access to information — while also creating new local jobs for the development, servicing and maintenance of the structures,” the City said in a press release.
Responses are due to the RFP by June 30, 2014, with a contract expected to be signed by the end of 2014. The winning bid will be required to install, operate, and maintain up to 10,000 public communication points which will replace and supplement NYC’s existing 7,300 payphone installations.
“By reimagining 20th Century payphones as 21st Century connection points, we’re making broadband access more equitable and accessible to every New Yorker,” Maya Wiley, counsel to New York Mayor Bill de Blasio, said in a statement.
“New York City’s payphones don’t get anything like as much usage as they did five to 10 years ago, because so many people have cellphones,” said Stanley Shor, assistant commissioner for franchise administration of the City's Department of Information Technology and Telecommunications.
New York Times reporter David Dunlap noted in an April 30, 2014, article that none of the 22 payphones on his way home from the newspaper’s New York office were in use.
But payphones do still have a role in the age of mobile telephony, Shor said. “Payphones are used by people who want to make anonymous 911 calls as well as by people whose cellphone isn’t working or who can’t afford a cellphone,” he said.
New York City’s 10 existing payphone franchises all expire on Oct. 15 of this year, although there will be a transition period until the new franchise starts. “We didn’t want to renew the franchises in the same way as before, with franchisees offering identical payphone services,” Shor said. “We know there is a public demand for free Wi-Fi, so we decided that getting a payphone franchisee to supply free Wi-Fi was a good way to meet this demand without the City having to pay for it.”
Shor said the City wants to award a single franchise for its public communications hubs, which can either by operated by one company or by a joint venture. According to the RFP, the franchise will produce $17.5 million in guaranteed annual revenue for the City until its expiry in June 2026.
“The franchise winner will be able to pay for their free Wi-Fi services through sponsorship and advertising,” said Shor. “We think the main revenue source for the communication points will be digital advertising.”
Communication points in commercial areas of NEw York City will be allowed to include two advertising panels per enclosure, although advertising will be banned on communication points located in exclusively residential districts.
“Static digital advertising, utilizing a 15-second fade in/fade out as images change, will be allowed in zones that allow commercial and/or manufacturing uses,” the RFP states. “Slow motion digital will be allowed in high-density commercial districts only on a case-by-case basis. However, digital advertising will not be allowed in historic districts or adjacent to a landmark site.”
“Digital ads on the touchscreens could be changed many times during the day,” Shor said. “They could also interact on a one-to-one basis with customers’ smartphones. However, the City is sensitive to the issue of privacy. When we review the proposals, we will take care to see that consumers won’t unwittingly disclose personal information to digital advertisers as a result of any technology that is implemented.”
The City of New York has spent a lot of time investigating the ways in payphones can be reinvented by providing new types of telecoms services.
“We looked at what other cities around the world had done with their payphone networks,” Shor said. “One inspiration to us was [British Telecom] in the U.K.”
To find new applications for its rarely-used red phone kiosks, BT came up with a scheme called “Adopt a Kiosk.” The scheme allows a local community to pay just £1 ($1.68) for a red phone kiosk in their area and use it for the purpose of their choice. As part of the deal, BT will remove the phone from the kiosk.
In July 2012, the City of New York issued a request for information that generated 22 responses. The City’s next step was to engage with urban designers and technology firms by issuing the Reinvent Payphones Design Challenge, asking "How can New York City reinvent payphones to make our city more accessible, safer, healthier, greener and better informed?"
In March 2013, the City’s Department of Information Technology and Telecommunications and its NYC Digital unit announced the Design Challenge’s results. The City named six finalist designs, five of which featured interactive touchscreens. Most of the winning designs turned the payphone concept into an informational center with touch- and gesture-enabled screens.
Team NYFi, an entry from Sage and Coombe Architects, won the award for Best in Connectivity from the City. NYFi also won the Popular Choice award which was based on a Facebook vote by New York City residents.
Municipal advertising sales firm Titan partnered with New York City-based technology firm Control Group for a design submission which won the "Community Impact Award." In a March 2013 statement, Titan, which owns one of the existing NYC payphone franchises, and Control Group said that they plan to jointly submit a proposal in response to the RFP.
The Design Challenge’s purpose was to generate ideas for the types of services that can be offered at New York's payphones, Shor said. “From the design challenge, we know what people are capable of imagining,” he said. “But, until we see the responses to the RFP, we don’t know what they are prepared to put money into.”
The RFP is structured to allow the maximum range of proposals — from relatively simple designs to more elaborate, high-tech communication devices with a variety of service offerings and capabilities. However, there will be restrictions on the size of the communication points.
“We don’t want to spell out what our vision is for New York City’s payphones, as we don’t want companies to think that, unless they provide what we specify, they stand no chance of winning the franchise,” Shor said. “Also, people shouldn’t think that they have to follow the winning entries to the Design Challenge.”
The City will not require that communications points include a coin-acceptance capability, as long as they offer an easy payment method. “It will be up to bidders to specify what payment methods they will offer at their communications points, for example card readers,” Shor said. “We’ve found that coin payments at our existing payphones have caused problems such as vandalism and theft.”
And the City also is open to proposals about potential vending opportunities at the communications points, according to Shor. “In fact, we are open to anything that can be done through telecommunications at these units,” he said.
Robin Arnfield has been a technology journalist since 1983. His work has been published by ATM Marketplace, Bank Technology News, Cards & Payments,Cards International, Electronic Payments International, Retail Banker International, Kiosk Marketplace, Mobile Payments Today, Virtual Currency Today, and The Guardian.