A multimillion-dollar project in New Orleans aimed at closing the digital divide and boosting economic development became mired in controversy and this week came crashing down. What went wrong?
In April last year, the City of New Orleans issued a request for proposals (RFP) for broadband connectivity and smart city solutions with the aim of improving services, promoting economic development and bridging the digital divide – up to 50 percent of households in certain communities don’t have internet access.
The city selected the Smart+Connected NOLA consortium as the winning bidder. The consortium includes Qualcomm, Jacobs Engineering and JLC Infrastructure, an investment firm co-founded by former professional basketball player Earvin ‘Magic’ Johnson.
Earlier this month, Mayor Cantrell promoted the smart city project with Johnson at community venues.
But just a few weeks later, a council investigation is underway into the bidding process and the consortium has pulled out, citing “significant uncertainty surrounding the future of the project.”
The city is now back to square one, and plans to re-run the RFP process.
What went wrong?
The multi-year proposal from the Smart+Connected NOLA consortium outlined a public-private partnership model at no up-front cost to the city on a “cost neutral” basis, through savings and revenue. It included a “city-directed” internet network, smart streetlights, smart traffic management and Wi-Fi kiosks. It also included scope for a revenue-sharing model via connectivity services, kiosk advertising revenues and monetising data such as from traffic sensors.
Late last year, questions were raised by the City Council about data privacy, costs and how the project would expand free and affordable internet access, as well as a potential conflict of interest relating to smart city consultancy Ignite Cities, which worked with the Cantrell administration on a pro bono basis and also has a partnership with Qualcomm and JLC Infrastructure from the winning consortium.
The city dismissed a protest from Cox Communications, which had also bid for the RFP. The city said it didn’t have a contract with Ignite Cities and that the company wasn’t an official member of the Smart+Connected NOLA consortium and had no economic interest in the RFP.
Recently, the situation escalated further following a series of reports in The Lens, a non-profit investigative news publication in New Orleans.
On 11 April, New Orleans City Council subpoenaed Jonathan Rhodes, the Director of the Mayor’s Office of Utilities, to share documents relating to the bid process and ordered him to appear at a council meeting on April 27. Council President Helena Moreno said there had been an “overall lack of transparency” about the project and there were concerns about “the potential of contract rigging”.
Further concerns were raised when it came to light that Rhodes and another city staff member had also provided outside consultancy, including for Qualcomm related to a Request for Information issued by the City of Los Angeles.
The council voted to launch a full investigation into the New Orleans RFP bidding process and to block a proposal for the city to proceed with a one-year pilot for the smart city project rather than a multi-year agreement. The former would not require council approval.
In a council meeting testimony yesterday, Rhodes said that Verge Internet, a Delaware-incorporated company set up by him and Christopher Wolff, a member of the city’s IT department, had only provided pro bono services to promote digital equity and does not have any employees, revenue or compensation.
As the situation intensified, the Smart+Connected NOLA consortium dropped out of the project on Monday.
“Regretfully, due to significant uncertainty surrounding the future of the project, the SC Consortium is unable to continue to pursue the project under these circumstances,” a statement said.
The group said it would co-operate with requests for additional clarification regarding the public bid process.
The council is pursuing the investigation.
Moreno said on Twitter: “It’s a shame that efforts to get our residents access to cheaper and better internet are being delayed by potential bid rigging and other lapses in transparency. We’ll [continue] to investigate and pursue accountability to make sure future efforts are successful.”
During the 27 April hearing, Councilmember Freddie King III asked Rhodes whether he could see “how this looks publicly, how this looks bad?”
Rhodes said he could but added: “It’s a nuanced situation. I don’t believe there’s been any kind of unethical activity, but I do see why questions are being asked.”
A New Orleans city spokesperson told capitaltribunenews.com that the pandemic highlighted the digital divide in New Orleans and that Black New Orleanians and residents on lower incomes are worst affected by lack of access.
“As the pandemic raged, our administration needed to take action,” they said. “In 2020, we published a public notice, asking for potential partners to express their interest in solving digital equity problems. In 2021, with our students still in remote learning, these conversations led us to publish the Smart City RFP requesting that the partner build fibre infrastructure, provide free and affordable internet in our most vulnerable communities at no additional cost to the city.
“Smart + Connected NOLA (SCNOLA) received the highest score in large part because their solution was cost-neutral. It’s worth noting that the Cox proposal would have cost the city over $150 million.
“We are deeply disappointed by SCNOLA’s decision to withdraw from consideration. Given the contentious atmosphere that’s been created around the issue, it’s hardly a surprise. This is a loss for kids that deserved better of us as their city’s leaders.
“Going forward, we will be reissuing the RFP. The need is still there. We welcome anyone with solutions to work with us.”
This may not be straightforward either, though, as Cox has argued it should now automatically get the contract as the second-highest-placed bidder.
capitaltribunenews.com has contacted members of the Smart+Connected NOLA consortium and Ignite Cities for comment.
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