By Benyamin Davidsons
The ailing Wi-Fi kiosk program, LinkNYC, which has failed to live up to its great expectations, is getting revamped. This time LinkNYC will be counting on the up-and-coming 5G network.
As reported by Crain’s NY, in the new agreement City Hall will allow LinkNYC’s private operator, CityBridge, to radically reduce the burdensome revenue-sharing payments, which CityBridge had been having trouble paying. On the other hand, CityBridge would be responsible to add a minimum of 2,000 kiosks outside of Lower Manhattan and Midtown over the next three years. CityBridge will also be on the line to pay back $60 million it owes the city from previous years.
The new planned kiosks would have 5G cellular equipment, as well as Wi-Fi and USB charging. The parties are hoping that the 5G equipment will add revenue, finally making the kiosks financially stable.
In 2014, the city tapped CityBridge to build the LinkNYC network. The lofty plan had been to replace old pay phone stations with internet kiosk which would also sell digital ads. CityBridge, which includes Qualcomm and tech startup Intersection, agreed to invest in the building and maintenance, and to pay out a set minimum of the revenue to the city, and then keep all additional advertising revenue. The company had trouble selling enough ads to even meet the city’s minimum requirements which it needed to payout. “The initial business deal included a lot of wildly unrealistic assumptions about how much advertising revenue the links would bring in,” said Jessica Tisch, commissioner of the Department of Information Technology and Telecommunications, which oversees LinkNYC. “Initially, it was contemplated they would bring in $3 billion-plus of revenue. To date, it has brought in something like 10% of that.”
The new deal, which CityBridge had to plead for, includes more attainable forecasts and agreements. As per Crain’s, the city will anticipate a total revenue-sharing payout of $160 million over 15 years, including about $70 million which it already got. Moving forward, the company will pay CityHall roughly 5% of the likely revenue from hosting 5G equipment and the display ads. The better terms can also help CityBridge attract new investors to fund the 5G-enabled kiosks.
Nick Colvin, chief operating officer of CityBridge, said the updated agreement will bring in $200 million of new private investment in LinkNYC. “Importantly, the amendment also means that New Yorkers will continue to have access to the current Link kiosks’ free public Wi-Fi and phone services,” Colvin said.
The deal still awaits the approval of the franchise and concession review committee, which will have its hearing on June 7.
