Councilmembers Concerned With Phone RFP

Staff Writer

A City Request for Proposal to update its pay phones has some City Councilmembers wary about a potential monopoly on the service.

Councilmembers Mark Weprin (D-Oakland Gardens) and Karen Koslowitz (D-Forest Hills) expressed concern about a Dept. of Information Technology and Telecommunications plan that would upgrade the City’s decaying pay phones, but would also put them all under a single operator.

Concerns over this move led to an oversight hearing by the City Council Technology Committee and Subcommittee on Zoning and Franchises.

The RFP would award one franchisee an exclusive, 15-year Citywide contract to replace the phones with new enclosures that integrate digital advertising displays and free public Wi-Fi hotspots. The winner would receive an additional 6,000 new locations as well. Currently, there are 10 companies responsible for the City’s payphones.

Weprin said that while he is in favor of replacing the phones with 21st century counterparts, he is against putting one company in charge.

“I’m afraid that if you offer it to just one franchisee, in very short order, they’ll be nothing but advertising space,” he said. “If you give a 15-year lease to one company, what incentive is there to improve the technology to make it better?”

The councilman was also concerned that if one company was put in charge, they would be more concerned with going where the advertising would be most effective, meaning the outer boroughs could receive less services than Manhattan.

Koslowitz compared the pay phone RFP to another single-provider contract the City agreed to: the CityTime payroll scandal, which cost the City more than $100 million. Nearly $600 million for the payroll project was wasted to fraud involving hundreds of contractors and subcontractors. The center of this scandal, Science Applications International Corp., paid $500 million to settle the federal investigation against it.

“Do I think they’re going to save money with the one company? No, I think they’re going to lose money,” Koslowitz said.

During the hearing, the matter of legality also came up, as this move may violate the Federal Telecommunications Act of 1996, which encourages competition in providing telephone, Internet and cable television services.

Proposals were due for the project on June 30. The DoITT has yet to announce a winner.

Reach Joe Marvilli at (718) 357-7400, Ext. 125,, or @JoeMarvilli.