Google's new company, Sidewalk Labs, was formed solely for the purpose of introducing technologies to cities. This month the company announced that it was leading a consortium of investors that acquired Control Group and Titan, the two companies that are managing the deployment of LinkNYC, the New York City initiative to convert around 10,000 city phone booths into public Wi-Fi hotspots. The rollout of these hotspots is slated to begin this month.
Sidewalk Labs has merged Control Group and Titan to form a new group, Intersection, which will now handle the deployment. But the question is, will LinkNYC's efforts be successful?
The finances of the effort are unclear, although New York City Mayor Bill de Blasio's office has estimated that the effort could bring in $500 million in advertising revenues over the next 12 years.
Press reports suggest that the hotspots will provide free Wi-Fi to a radius of up to 150 feet, be able to charge mobile devices and offer an interactive screen with Internet access and access to local services and information. Some 400-500 kiosks are expected to be in operation by the end of this year.
Details on installation are unclear, although other companies said to be involved in the effort are Qualcomm (NASDAQ:QCOM), Antenna Design, Transit Wireless and Comark. Transit Wireless deploys small cells and Comark manufactures outdoor hardware.
But Google's Sidewalk isn't the first to try to retrofit New York City phone booths into hotspots. Cable MSO Cablevision (NYSE: CVC) also tried to do this but was hindered by ongoing battles with union workers. In October 2014 the New York City Council moved to block any potential deal that would let Cablevision convert the city's obsolete network of pay-phone booths into Wi-Fi hotspots.
In addition, ISPs like Earthlink also have tried to build municipal Wi-Fi networks but were met with a bevy of technical challenges and, perhaps most importantly, business model issues because they couldn't monetize their efforts. According to a 2013 report in the Economist, "by 2008 EarthLink and others like it, including groups within AT&T and Motorola, pulled the plug on nearly every [municipal Wi-Fi] network under construction in North America." Most of the networks were either shut down or sold at a steep loss.
Will Sidewalk's efforts be different? The finances of the project remain murky and it is entirely possible that this free Wi-Fi effort will again be awash in red ink. However, the same can likely be said of Google Fiber, as the company has never disclosed subscriber counts or profitability associated with that effort.
The main thing that is different is that Google seems to be willing to fund the effort, whether it is profitable or not. The company wants to make the Internet experience as ubiquitous as possible, which partly explains its fiber push, its Android efforts and many other endeavors. And Google has the deep pockets to sustain such efforts.
Also, there is some merit to the idea of using phone booths. They provide the right-of-way and are generally located in areas where they are likely to be used.
Google's recent moves show that it is intent on making this work, and New York will be an interesting test case. With Google's finances and its focus more on the overall growth of Internet usage and less on the profitability of this project, it could be different this time around, at least in terms of sustainability, if not in terms of profitability.
Yes, backers of municipal Wi-Fi may now be able to party like it's 2005. Apologies to Prince. --Jeff