Monday, March 15, 2010

NY/NJ Authority Puts out Bid for Wi-Fi on Trains

NY/NJ Authority Puts out Bid for Wi-Fi on Trains

I'm not sure the Metropolitan Transportation Authority (MTA) has any chance of practical bids for their RFP: A long-awaited RFP is out for providing Wi-Fi service on all Metro-North and Long Island Railroad (LIRR) trains and most stations. Those rail lines accommodate nearly 600,000 passenger trips each week. (The PDF of the RFP has disappeared from the MTA site, but Google has a text cache.)

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 24x7 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.

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