New York's MTA issues RFP on wi-fi services; observer asks, "Where's the digital screen component?"

March 15, 2010 by Dave Haynes

It’s interesting to see how far the industry has progressed when an RFP from a very large gov’t authority comes out and an observer asks why there’s no digital signage component.

It’s interesting to see how far the industry has progressed when an RFP from a very large gov’t authority comes out and an observer asks why there’s no digital signage component.

Wi-Fi Net News (not a daily read, but amid all the auto-generated sites Google Alerts does flag some useful stuff) has a piece up about the New York-area’s Metropolitan Transportation Authority (or MTA) issuing a long-awaited RFP for providing Wi-Fi service on all Metro-North and Long Island Railroad (LIRR) trains, and at most stations. Those rail lines handle about 600,000 people every week.

The MTA wants a service provider who would operate a network to bear all the expense of installation and operation (including railroad labor costs for same), provide 24×7 customer support, and uninterrupted service.

But the proposal is pretty muddled. While digital advertising (changeable signs on board trains and at stations) should be part of a bidder’s thinking to minimize the cost in installing such systems, there’s no spec for those systems. A bidder can build a bid partly around offering such services. The MTA also likes bids in which the authority shares in revenue.

I don’t see how this could fly. No sensible firm would propose taking on all this expense without any assurance of revenue beyond the public Wi-Fi side of the system. Despite the large number of passengers, many of those most likely to pay already have 3G service on smartphones or through laptop cards. There’s no operational services component, and that should be the baseline for any new rail RFP of the last five years.

It’s not so much that 3G service works perfectly along the various part of the system, but it certainly works well enough. A service provider would either need to be a cell operator that can use the system to promote and sell Wi-Fi by itself and a combination of 3G and Wi-Fi (AT&T and T-Mobile notably in this position), or build on another technology that would go well together to feed service to trains and mobile devices (Clearwire’s WiMax).

The system described would likely cost many tens of millions of dollars to build to the specifications that the MTA is requiring, without any substantial potential to reclaim that as revenue.

That is not a job – given all the labor issues and cost overruns – I would touch with a 10 mile pole if I was with a Wi-Fi provider. It’s also not that great a media opportunity. As is noted, 3G and smartphones means a lot of people are by no means captive and looking for something to stare at. By adding Wi-Fi, that means people with Wi-Fi enabled smartphones AND laptops all have something to do other than stare at an ad screen somewhere down the car.

A rail line to ruin for someone …