Early financial returns on the city’s free public WiFi kiosks have been so underwhelming that the de Blasio administration plans to let the tech consortium running the system to defer profit-sharing payments.
The original 2016 agreement between the city’s Department of Information Technology and Telecommunications and the consortium — known as CityBridge — called for the city to receive escalating annual minimum payments, plus 50 percent of revenues from ads on the “LinkNYC” kiosks, over the 15-year deal.
But over the first two years of the program, the city collected just shy of $43.4 million in payments, narrowly beating the $42.5 million minimum it was guaranteed.
Now, under an amended deal that the city’s Franchise and Concession and Review Committee has been asked to ratify at a May 7 meeting, CityBridge can delay paying the city its share of the revenues above the annual minimum payments until the last three years of the contract, when the profits will be due with 10 percent interest.
Officials said the change would allow CityBridge to invest more money into the program.
CityBridge declined to say whether the venture has been profitable, or reveal its expenditures, which could account for the low initial returns.
Moreover, the restructured contract allows CityBridge to entice foreign investors using the federal “EB-5” program.
The program gives green cards to foreigners who invest a minimum of $1 million into a US company that employs at least 10 Americans.
A LinkNYC wifi kiosk.Angel Chevrestt
The rejiggered deal also gives the consortium — which includes a company whose board members include former Deputy Mayor Dan Doctoroff — an additional two years to install the planned 7,500 citywide kiosks.
Only 1,771 kiosks have been set up to date.
City Councilman Ben Kallos (D – Manhattan), a software developer who previously raised concerns about some of the existing kiosks not working properly, was flabbergasted after learning about the amended contract.
“If [CityBridge] is not going to have to make millions of dollars of its payments for a decade, then they should build all the kiosks now,” he said. “They shouldn’t be getting an extra two years.”
However, city officials say they are bailing out CityBridge because contractors encountered unexpected infrastructure challenges during the rollout.
DoITT spokeswoman Kate Blumm defended the retooled deal, saying, “the most important parts of the program — the number of Links and guaranteed revenue to the city — remain unchanged as we propose smaller adjustments for lessons learned along the way, and unexpected things discovered beneath the sidewalk, more than two years in.”
Jen Hensley, president of LinkNYC, said that the amendment “reflects lessons learned,” while installing a “first-of-its-kind program throughout the five boroughs.”
“We are updating the deployment schedule and adjusting siting requirements based on realistic street conditions so that we can more efficiently bring Link’s super-fast free WiFi and services to communities across the city,” she said.
Along the way, the project’s operators were forced to add filters to the kiosks after The Post reported in 2016 that homeless people were using the tablet-equipped street kiosks to access porn sites.