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Pay phones could get new lives as Wi-Fi hotspots

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The public pay phone, seen by many as a place for graffiti and vandalism (and maybe Superman's changing room) but hardly a modern day need, may get new life as a Wi-Fi hotspot.

At least that's what's being put forward in New York City if the political details can be worked out. Technologically, the idea of installing and operating 10,000 "public communications structures" (solar-powered Wi-Fi hubs) in place of pay phone kiosks has momentum; politically, the idea of consolidating all those units under one company has a bit bumpier road with some legal potholes ahead of it.

Right now, 10 companies manage the city's pay phone infrastructure, Crain's New York Business reported, but the city believes that a single winner of a bidding process can deliver a new era of pay phones that can handle such chores as free Wi-Fi and potentially cell phone charging. Google (NASDAQ: GOOG), IBM, Samsung and Cisco have all shown some interest, the story said.

The winner-take-all approach would potentially destroy one small company, Telebeam Telecommunications, which could lose most of its revenue if it didn't win the bid and which would consider legal action to stop the city from awarding that bid.

"There is nothing that one provider can do that three or four qualified companies can't," the company's founder and CEO, Ray Mastroianni, told Crain's. "When you have a monopoly, you have no innovation."

On the other hand, when you have a current pay phone you have graffiti and a limited revenue stream and the city would like to do something about it with a plan that turns those kiosks into potent advertising sites, with digital panels displaying multiple ads and more modern Wi-Fi and cell phone-based features.

Some are warning that a pay phone monopoly would violate the Telecommunications Act of 1996 but the Department of Information Technology and Telecommunications (DoITT) dismisses those concerns and is ready to plow ahead with an RFP.

Elsewhere in the pay phone space, South African provider Telkom probably has an easier row to hoe with a plan to turn its 20,000 or so pay phones into Wi-Fi hotspots that would look the same but include a transponder sending out a signal in a 10-meter radius.

For more:
- see this Crain's New York Business story (reg. req.)
- Telecompaper has this story

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