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8/10/2019 Objection to NYC Wi-Fi Payphone contract with CityBridge
1/7
~I~~C3I~
~~TI~T~
December-
8,
2014
SUBMISSION
FOR
THE
HEARING
RECORD
L a L i r a Ringelheim, l e r k
F r a n c h i s e and
Concession Review
Com~ittee
125
Wor th
S t r e e t
New
York,
NY
10007
G i b s o n . Dunn
&
r u t r h e r
L I . P
200
Park Avenue
New Y o r k , NY
10166
-0193
T e l 212.351.~i000
www.gibsondunn.com
R a n t l y M. a s t r o
D i r e c t :
+ 1 2 1 2 . 3 5 1 . 3 8 2 5
F a x : + 1 2 1 2 . 3 5 1 . 5 2 1 9
R M a s t r o C
i b s o n d u n n . c o m
C l i e n t : 0 0 0 0 0
- 0 0 0 0 0
Re: Ne~v
York
i t . > >
De
/ ~ a r t ~ r i e n t
o f ' I n f o r t ~ 2 u t i o n .
T e c h n . o l o ~
> y
c ~ n . c l
T e l e c o n i i ~ T . u n i c a t i o l i s
Matter of
CityBridge,
LLC
D e ar M s .
ingelheim:
T h e
New
Y or k
City
D e p a r t m e n t
o f
Information T e c h n o l o g y
and
Telecomml~nications
DoITT) as Coday
r e c o m m e n d e d t h e Franchise
and
Concession
R ev i ew C o m m i C t e e
(
FCRC) o
approve a proposed
12- y e a r
f r a n c h i s e
agreemen t
a l L i e d
i n t h e hundreds
of
m i l l i o n s of o l l a r s
between
t h e City
of
New Y or k and CityBridge,
LLC
(
CityBridge) nder
whic h
CityBridg~
x c l u s i v e l y
w o L ~ l d dismantle
x i s t i n g pay telephone
a c i l i t i e s a n t i
r e p l a c e
t h e m w i t h
commLinications s t r u c t L l r e s
o f f e r i n g
f r e e
Wi- F i s e r v i c e and,
t
s o m e t r t i ~ c t L i r e s ,
t r e e
p u b l i c
pa y
elephone s e r v i c e
thereby
e l i m i n a t i n g
a l l
competition
i n t h e
p r o v i s i o n i n g
of
payphone
s e r v i c e s
and
o t h e r
telecommunications
s e r v i c e s
f r o m
t h e C i t y ' s p u b l i c
r i g h t of
way .
Our
law
firm, Gibson ,
D u n n r L i t c h e r
LLP
GDC ) ,
a r ~ d
s p e c i f i c a l l y , a ~ y
p a r t n e r , M y l a n
D e n e r s t e i n ,
and
I e p r e s e n t
T~lebeam
Telecommunicati on s Corporation
T e l e b e am
) .
On
behalf of Telebean~, we
rovide t h i s
w r i t t e n s L l b m i s s i o n i n
o p p o s i t i o n
t o t h i s
f r a n c h i s e
r e c om m e ndation.
We
e s p e c t f u l l y urge t h e FCRC o
r e j e c t
t h i s
proposed
a g i - e e ~ n e n t
because,
f o r
t h e reasons
explained
h e r e , i t s p r o v i s i o n s
v i o l a t e
t h e
l aw--
e d e r a l , s t a t e , and
l o c a land,
even
a p a r t fr o m
t h a t ,
because t h e
process
followed
b y
DoITT n
reaching l i i s
r e c o m m e n d a t i o n i s t a i n t e d b y
apparent
n f a i r f a v o r i t i s m and
c o n f l i c t s
of
n t e i e s t .
My i g n i f i c a n t
p r i o r ' experience i n City
and f e d e r a l
g ov e r n m e n t
e r v i c e
informs
my
understanding
of h e g r a v i t y of h e
apparent procedural
and s u b s t a n t i v e
flaws n
t h i s
proposed
agreement.
I n p a r t i c u l a r , fr o m
1994
o
1998,
served a s
M a y o n
Rudolph G i n l i a n i ' s
Chief of
t a f f and t h e n as
New
Y or k C i t y ' s
Deputy
M a y o r o r
Operations. In t h o s e
c a p a c i t i e s ,
oversaw
t h e
C i t y ' s
f r a n c h i s i n g process and
wa s
h e D ep u t y
M a y o r o whoan
DoITT
e p a r t e d . And s D ep u t y
M a y o r , w a s
u t h o r i z e d
t o a c t
o n t h e
M a y o r ' s
b e h a l f .
Since
t h e n , i n p r i v a t e p r a c t i c e ,
I have
e p r e s e n t e d
m a n y
c l i e n t s
c h a l l e n g i n g gove~
n m e n t a l a c t i o n s ,
i n c l u d i n g
f r a n c h i s e d e c i s i o n s,
8/10/2019 Objection to NYC Wi-Fi Payphone contract with CityBridge
2/7
Laura
Rii~gelheim,
Clerk
December
,
2014
Page
2
Simply
p u t , t h e
FCRC h o u l d
n o t approve
t h i s
proposed
agreement
because t h e
p r o c e s s
b e h i n d
i t
and
t s
terms
v i o l a t e
t h e
l ~ l w .
F i f
s t
t h e
proposed
agreement
r e s u l t e d from
a
Request
For
r o p o s a l s
RFP)
r o c e s s
a p p a r e n t l y
t a i n t e d
b y
r n p e ~ - m i s s i b l e
f a v o r i t i s m a c i d
b i a s
i n t h e
award p r o c e s s .
S e r i o u s
a l l e g a t i o s
} g a v e
a r i s e n
concerning t h e
r E l a t i o n s h i p
between t h e
C o n t r o l Group
o n s u l t i n g
f i r m t h a t i s
one of h e
companies
comprising
t h e
p r e v a i l i ~ ~ g
CityBridge
c o n s o r t i L i m
and
Mayor de B l a s i o ' s
a d m i n i s t r a t i o n ,
ma n y
of
which
have
been
p u b l i c l y
r e p o r t e d . I n
p a r t i c L l l a r , a c c o r d i n g t o
p u b l i s h e d
a c c o L ~ n t s ,
Robert
Richardson,
a
former
s e n i o r
e x e c u t i v e a t
t h e
C o n t r o l Group,
e f t t h e
C o n t r o l G r o L ~ p
a t t h e end
of
t i i l y 2014 o t a k e
a s e n i o r
technology
p o l i c y m a l < i n g p o s t
t c ~
help
d i r e c t technology
s t r a t e g y from C i t y
Hall t
t h e s u i n . e t i r i i e
t l 2 . a t
DoITT
was
d e l i b e r a t i n g
o n
: h e
r e s p o n s e s t o
t h e RFP.
S e c '
E x l l . A.
Indeed, h e
New
York Daily
News e p o r t e d
j l ~ s t
t h i s
p a s t S a t u i
d a y ,
Dec emb er
6,
2014,
h a t
e
- m a i l s
s h o w
Richardson was
n v o l v e d
i n
C o n t r o l
Group's
b i d f o r
t h e Wi
- F i
j o b ,
and
he
t h e n
i n t e r v i e w e d
f o r h i s
c u r r e n t
h i g h
- l e v e l
C i t y
government ob
while h e
b i d d i n g
c o n t i n u e d .
See
Exh. B.
Richardson's
2014 m o v e
o
C i t y
H a l l
p l a c e d
h i m
a t t h e
NYC
echnology
Development
C o r p o r a t i o n and
p l a i n l y p r o v i d e d
h i m t h e
o p p o r t u n i t y
t o
work
w i t h
DoITT
o f f i c i a l s
o n technology
~ ~ a t t e r s
a c t t h a t
a e q u i l es
s p e c i a l
s i g n i f i c a n c e
h e r e g i v e n
t h a t ,
p r i o r
t o
j o i n i n g
t h e
C o n t r o l
Group,
ichardson
h e l d a
managemen t
o s i t i o n a t
DoITT.'
A d d i C i o n a l l y , o n
n f o r m a t i o n
and
b e l i e f ,
w h e n
Richardson
l e f t DoITT o
j o i n
t h e
C ~ r i t r o l Group
n
September 20 l 2, he
c o n t a c t e d ahigh
- l e v e l
DoITT
o f f i c i a l
nn
b e h a l f
of
Contro] T ~ o u p
i n a
manner
m p l i c ~ i t i n g
S e c t i o n
2604(d)(2)
~ f
t h e
New
York
C i t y
C h a r t e r ( p i
o h i b i t i n g
a
u b l i c s e r v a n t
from
a p p e a r i n g
b e f o r e t h e
C i t y
agency
s e r v e d
by
t h e p u b l i c s e r v a n t
w i t h i n
a
p e r i o d
of
on e
y e a r
a f t e r
C i t y
employmen t
n d s j , an d
t h a t c o n t a c t
was
e p o r t e d t o
t h e
New
York
C i t y
Department
~ f
I n v e s t i g a t i o n .
Moreover, o n t r o l
Group has
been a
v a l u e d
s u p p o r t e r
of
Mayor
d e
B ~ l a s i o ' s
A d m i n i s t r a t i o n
p r e d a t i n g
i t s p a r t i c i p a t i o n i n
t h i s
RFP.
For
example, h i l e
R i c h a ~ ~ d s o n
worked
a t
C o n t r o l
G r o t i i p ,
he
p a r t i c i p a t e d
i n
a
March
201A s e s s i o n
a d d r e s s i g
use
of
technology
t o
e n s u r e a
smooth
r o l l o u t
of
h e
1 V I a y o r ' s
s i g n a t w - e
expansion of
l
e -
k i n d e r g a r t e n
e n r o l l m e n t .
See Exh.
I n
J u l y 2012, while
Richardson
worked a l
D o I ' T1, l ~ e
agency s s ~ i e d a
R e q ~ i e s t
For
n f o r n ~ a t i o i ~
I 2 F I
j ,
p r e s a g i n g
t h e
2014 R F P ,
n
t h e
F u C ~ u e
of ~ i b l i c Pay
Telephones
o n New
York C i t y
Sidewalks ~ ~ d
. P o t e n t i a l
A l t e r n a t i v e or
A d d i t i o n a l F o r m s
o f
Telecommunications
< l c i l i t i e s
o n New
York
C i t y Sidewalks.
To h e e x C e n t
Richardson
~ ~ e r s o n a l l y
and
s u b s e a n ~ i a l l y p a r t i c i p a t e d
i n t h e
p r e } ~ a r a t i o i l o ~ P
t h a t
RFI
or n
e v a l u a t i n g
responses
o
i t he
s
b a r r e d
from r e c e i v i n g
compensation
F o r
p r i v a C e -
s e c t o r s e i v i e e s
r e n d e r e d
i n
r e l a t i o n
to
h e
RFI,
which would
i ~ c ( u d e
any
work he
l i d
o n
b e h a l f
o i ' t h e
Control Group
~ ~
i t s
r e s p o n s e
t o
t h e
RFP.
See
C h a r t e r
6 0 4 ( d j ( 4 ~ j
(former
p u b l i c
s e r v a n t s a r e .
permanently
b a r r e d
from
a p p e a r i n g ,
whether n a p a i d
or unpaid
c a E ~ a c i t y ,
before
t h e
c i t y ,
or receiving]
o m p e r ~ s a t i o n f o r
auy
s e r v i c e s
rendered,
n r e l a l i o ~ ~
t o
any
p a r t i c u l a r m a t t e r
involving t h e
wi ne p a r t y
or
p a r t i e s
w i t h r e sp e c t t o
which
p a r t i c u l a r
m a t t e r such
p e r s o n
had p a r t i c i p a t e d
p e r s o n a l l y
and
s u b s t a n t i a l l y
a s
a
p u b l i c
s e r v a n t
through
c l e e i s i o r ~
a p p r o v a l ,
r e c o m n ~ e n d ~ i t i o n ,
i n v e s t i g a t i o n
o i
o c h e r
s i m i l a r a c e i v i t i e s . ) .
8/10/2019 Objection to NYC Wi-Fi Payphone contract with CityBridge
3/7
t~l~(~1~1T
~l`~~
Laura
Ringelheim, Clerk
December 8,
2014
Page
3
C .
I n
a May 014
speech
while
Control
Group was
presumably
working
o n t s
proposal i n
i - e s p o ~ l s e t o
e h i s
RFP
the a y o r
himself
a l l e d
s p e c i a l
l t t e n t i o n
t o
t h e
C o n t r o l Group's
e f f o r t s
a s a
p a r t n e r [ ] i n
t i n e
C i t y ' s
pre
-
k i n d e r g a r t e n expansion.
See Exh. D.
There
i s
n o
i n d i c a t i o n o n
t h e p u b l i c r e c o r d
t h a t t h e
New
York
City C o n f l i c t s
o ~ f
I n t e i e s t
Board
advised
Control
Gro up t h a t i t could
p a r t i c i p a t e
i n
t h e
RFP
hile
~ a s a
p a r t n e r [ ] t o
t h e
Administration i n
t h i s
manner.)
In l i g h t o f
i c h a r c l s o n ' s
r o l e
a t
Control G r o L ~ p
( e s p e c i a l l y i n
connection
w i t h
t h e
CityBridge
p r o p o s a l ) ,
Control
Group's Unique
r e l a t i o n s h i p w i t h
t h i s
A d m i n i s t r a t i o n
( e s p e c i a l l y i n
connection
w i t h
i t s
high
-
p r i o r i t y
pre -
k i n d e r g a r t e n
p r ~ ~ ~ r a r n ) ,
and
Richardson's
o t h e r apparent
p r i o r
l a p s e s , t h e r e
a r e
now e r i o u s
q u e s t i o n s
about h e
bona
i d e s
o~ h i s p r o c e s s
t h a e need t o
be n v e s t i g a t e d
f u r t h e r
b e f o r e
C h i s
body
a c t s
o n D o ITT's
recommendation.
Richardson's
course o f
conduct
and
c L i r r e n t h i g h
- l e v e l
p o s i t i o n w i t h i n
t h e
A d m i n i s t r a t i o n have
a i s e d
] e b i t i m a t e c o n e ~ , r n s
t h a t
CityBridge
p r e v a i l e d i n t h i s
RFP
r o c e s s
through
f a v o r i t i s n ~ i
g r i d
b i a s
oncerns t h a t
r e s p o n s i b l y
have t o
be
a l l a y e d
b e f o r e
any
f i n a l
d e c i s i o n i s
m a d e h e r e .
See
Exh . E. bldeed,
t i s
f l a t l y
impermissible
t o
award f r a n c h i s e s
t ~ i i n t e d by
a v o r i t i s m
and
b i a s : Public
employees
m u s t m a k e
e r t a i n t h a t
t h e i r
conduct
does
not
r a i s e
s u s p i c i o n
or
g i v e
t h e
appearance
t h a t they a i e
i n
v i o l a t i o n o f
h e i r p u b l i c
t r L ~ s t ,
i l ~ e a n i n g
t h a t
they
m u st
prevent
a v o r i t i s m
i n
p u b l i c
c o n t r a c t i n g ,
among
t h e r
e s p o n s i b i l i t i e s
under
Procurement
Policy Board Rule
-
03(a)(]
.
F u r t h e n Y ~ o r e ,
t h e
New Y o rk
City
c o m p t r o l l e r
a u d i t
r e s p o n s i b i l i t i e s
i n c l ~ l d e
a d d r e s s i n g
u n ~ a i r ~ n e s s ,
f a v o r i t i s m ,
or
impropriety
n
c o n t r a c t i n g .
S e c t ,
e . g . ,
Procurement
Policy
Board Rule
~
- 0 3 ( a ) ( 2 1 ) .
Indeed,
r i e
o f
h e
c e n t r a l
motivating
f o r c e s
behind New
Y o rk
procurement
law i s
to
guard
a g a i n s t
f a v c ~ r i t i s n ~ , imps
o v i d e n c e ,
extravagance, r a u d
and
c o r r u p t i o n .
Assoc.
e ~ t i .
C o i l . t j s . g f A s ~ ~ i . v .
N.Y.
t a t e
T l a f u v v u y
A c ~ t l ~ z . , 8 8
N.Y.2d 56,68
1996).
This
proposed
agreement
s
o f
i g n i f i c a n t
scope,
u r a t i o n ,
and
importance t o
t h e
b e n e r a l
p u b l i c .
Given t h e s t a k e s , t h e
FCRC
hould not
r i s k
undermining
p u b l i c
confidence
i n
t h e
i n t e g r i t y o f h e
proceedings by
approving
C h e
proposed agreement
w i t h o t i i t
a t
t h e very
e a s t
conducting a
thorough and
meaningful f a c t u a l
i n v e s t i g a t i o n i n t o
t h e
d i s t r e s s i n g
and
s u s p i c i o u s
c i r c u r n s t a n c e s concerning
Richardson's
e m p l o y m e n t
i s t o r y and
t h e
Control
Gl
o u p ' s c l o s e
t i e s t o
t h e
Administration
t o
e n s L l r e
t h a t
t h e
proposed
agreement s
not
h e
r e s u l t
o f
improper
n f l u e n c e .
Second, h i s
p a o p o s e d a g i
cement v i o l a t e s
t h e
Telecommnnicatiot~s
Act
of 1996, L i b .
L. N o .
104-104, ' 1 0
S t a t . SC,
n which
C ongress
l i m i n a t e d the
m o n o p o l y r a n c h i s e s
o f
o c a l
telephone
s e r v i c e
p r o v i d e r s
by
e n a c t i n g
47
7 . S . C .
~
253,
which p r o h i b i t s s t a t e
and
l o c a l
r e g u l a t i o n
t h a t
impedes
t h e
p r o v i s i o n
o f
t e l e c o m m ~ n i e a t i o n s
s e r v i c e .
'
V e r i z c ~ 1 1
C o n i ~ n c ' n s
I n c .
v .
FCC
3 5
U.S. 467,
491 (2002)
c i t a t i o n
o m i t t e d j .
As
elebeam
has
explained i n i t s
complaint seeking
d e c l a r a t o r y
r e l i e f
a g a i n s t t h e City
under
S e c t i o n 253,
i l e d
i n t h e
United
8/10/2019 Objection to NYC Wi-Fi Payphone contract with CityBridge
4/7
Laura
Ringelheim, lerk
December
8,
2014
Page4
S t a t e s
D i s t r i c t
Count
o r t h e
E a s t e r n
D i s t r i c t
of New
Yor k on
Deeembei- 4,
h e
C i t y
cannot
f o r c e
Telebean
and
o t h e r c L U - r e n t
payphone
r a n c h i s e
h o l d e r s t o e x i t
t h e
market n
favor
of
CityBi i d g e
a s a
monopoly
s e r v i c e
p r o v i d e r . T h e City
i s
doing so
n
v i o l a t i o n
o i ~
f e d e r a l
law,
which
pre
-empts
t h e C i t y ' s
p u r p o r t e d
a c t i o n
h e r e .
See g e n e r a l l y N . J .
Payphoize
Assn .
T o w n of
West
New
o ~ ~ k ,
299
. 3 c l
235,
247
3d
C i r .
2002).
Notably,
r i o r t o
t h e
r e l e a s e
of
t h e
RFP he
managi~~g
m e m b e r
company
of h e
C i t y B r i c l g e
c o n s o r t i L n n ,
T i t a n
Outdoor LLC
Titan
) ,
explained t h a t
very p o i n t t o
DoITT
namely, h a t
S e c t i o n
253
o r b i d s
t h e
s i n g l e -
f r a n c h i s e e
monopoly scheme
e n n ~ a l t o
t h e
RFP.
See
Eah. F.
T e l e b e a r n ' s
complaint
( a t t a c h e d a s
Exhibit Gj
l l e g e s
m u l t i p l e
independent
v i o l a t i o n s
of
e c t i o n 253
based
on
t h e
RFP
nd
r e s L ~ l t i n g
award, and
r a t h e r
t h a n
compounding t h e
l e g a l e r r o r i n
t h e
RF'P
p 1 - o c e s s
so
f a r ,
t h e FCRC
hould,
t
a
m i n i ~ n L i m ,
d e f e r
any
a c t i o n
on
l ~ e
proposed
agreement
u n t i l
t h e
City
has
answered t h e
~ i l l e g a t i o n s
i n t h e
f e d e r a l
a c t i o n . '
T l a i ~ d ,
even i F
( c o n t r a r y
t o
f e d e r a l
I~w)
t
were
s o m e h o w p e r m i s s i b l e
under
S e c t i o n
253 o
pursue
a s i n g l e -
f r a n c h i s e e
model i n t h e
telecommunications s e t t i n g ,
DoITT
xceeded
i t s
a u t h o r i t y
~ l n d e r
t h e
City
C 1 l a r t e r i n
proceeding t o
reach
a
d e t e r m i n a t i o n on
an
RFP ased
on
such a mo d el
without
s p e c i f i c
a L ~ t h o r i z a t i o n from
t h e
C i t y
Council.
Section
363(a) of
h e
C h a r t e r '
provides
t h a t a r a n c h i s e
s h a l l
be
a w a l - d e d
only
i n accordance
w i t h
t h e
p l - o v i s i o n s
of
an
a u t h o r i z i n g
r e s o l u t i o n adopted by
t h e
Council.
T h e
RFP
e r e
p u r p o r t e d t o
cobble
t o g e t h e r C h e
necessary
a u t h o r i z a t i o n
from two
such
i - e s o l u t . i o n s :
Resohition 2309
of
2009
(which
a t i l t h o r i z e s t h e
g r a n t i n g of
r a n c h i s e s
f o r t h e
i n s t a l l a t i o n
of
u b l i c pay
telephones
and
a s s o c i a t e d egLlipment
on,
over,
and under
t h e
i n a l i e n a b l e
p r o p e r t y of
h e C i t y ) ,
and
Resolution
191 o i '
2010
which
a u t h o r i z e d
t h e
g r a n t i n g
of
r a n c h i s e s
f o r
i n s t a l l a t i o n
of
telecommunications
equipment
and
f a c i l i t i e s
on,
v e r and
Under t h e
i n a l i e n a b l y
p r o p e r t y
of
the
City i n
connection
with t h e
p r o v i s i o n
of mobile
telecommunicltions
s e r v i c e s from
t h e
p u b l i c
r i g h t of
way). B L ~ t
n e i t h e r of
h o s e
Resolutions
can be
c o n s t r u e d t o
a t i ~ t h o r i z e
a
s i n ~ l e -
f r a n c h i s e ~
model Y i e r e .
Indeed,
on
J L ~ I y 29,
2014,
a l e t t e r
signed by
24
m e mb e r s
of
h e
City
Council c a l l e d
DoI TT's
a t t e n t i o n
t o
e x a c t l y
t h a t
f a t a l flaw,
t r e s s i n g
t h a t .
t h e
c r e a t i o n
of any
t e l e c o m m L l n i c a t i o n s
and
technology
monopoly
would
w o r k
a
L l s u T p i n g
of
h e
Council's
T h e
m o n o p o l i s t i c c l ~ a r a c l e r
o l ' t h e
proposed
agreemenC
s ~ ~ o t
cured
by t h e
p r o v i s i o n i n
S < ; c t i o n
3 . 5
o i ' t l i e
proposed
agreement
allowing
t h e
C i t y
L o
seek
o t h e r p r o v i d e a s
a f t e r
afour
- y e a r
e x c l u s i v i t y p e r i o d
F o l l o w i n g
t h e e f f e c t i v e
date
of
h e
agreement d e f i n e d as
a
d a t e w h e ~ ~
a p p r o v a l s a r e
r e c e i v e d
f r o n ~ ~
government
commissions,
which
could t a k e ,
upon
i n f o r m a t i o n
a i
d b e l i e f ,
12
o
18
months).
Companies cannot
put
C l l e i r
b u s i n e s s
o p e r a t i o n s
on
bold based
on l ~ e
mere
p o s s i b i l i t y
t h a C ,
more
t h a n i ' o w ~
y e ~ i r s ,
t h e y may
he
given
a
chance
t o
t a k e o v e r
Prom ashen-
e ~ ~ t r e r ~ c h e d
i n c ~ i r n b e n t
m o n o p o l i s t .
Once
C i t y 1 3 ~ i d g e
o h t a i n s
o w n e i s l ~ i p oP h e
e x i s t i n g
payphones from
Telebe
8/10/2019 Objection to NYC Wi-Fi Payphone contract with CityBridge
5/7
Laura
Ringelheim,
Clerk
December
8,
2014
Page
5
r o l e ,
and
emphasizing
t h e
need o r
t h e
agency t o
w i t h d i
aw t h e
R I ~ ' P ,
and submit
u 1
a p p r o p r i a t e ,
new
A L l t h o r i z i n g
R e s o l u t i o n t o
t h e
C o u n c i l .
S i c : Exh.
H.
i s r e s p e c t i n g t h e
s e p a r a t i o n
of powers
and t h e
e x p l i c i t
c o mman d
of h e
C h a r t e r , DolTT'
e v e r t h e l e s s
proceeded C o
i s s u e
a
d e t e r m i n a t i o n
on
t h e
RFP
s
Chough
t h e
C i t y
C o u n c i l ' s
views c o u l d
he
brushed
a s i d e .
F L i r t h e r
i n v a l i d a t i n g
DoITT's
n t e r p r e t a t i o n
of h e
R e s o l u t i o n s i s t h e
p r i n c i p l e
t h a t
such
enactments
must
be
c o n s t r u e d
t o
a v o i d
s e r i o u s
c o n s t i t t i ~ t i o n a l
q u e s t i o n s ,
s e e ,
e . ~ . ,
Mutter
of
Jacob,
6 N.Y.2d
6 . 5 1 ,
667
1995)-
-and t h e
C i t y has s e t
a
c o u r s e i n d i r e c t
c o n f l i c t
w i t h
t h e
r e s t r i c t i o n
on
e d e r a l
and s t a t e
c o n s t i t u t i o n a l
r e s t r i c t i o n s on
i n a d e q u a t e l y
c o ~ ~ ~ p e n s a t e d
t a k i n g s .
' T h y proposed
agreement
a l l s
f o r
f o r c i n g
Telebeam t o
s e l l
i t s
e x i s t i n g
payphone
a s s e t s so
t h a t
CityBridge
can
t a k e
them
and
b L l i l d
on t h e i r ,
which
w i l l
f o r c e
Telebeam
o u t
of
b u s i n e s s
ai
Telebeam
has an
e n t e r p r i s e
v a l u e a s
an
e x i s t i n g
b u s i n e s s
t h a t
no
amount of
a f t e r
- t h e - f a c t
money damages
w i l l be
b l e t o
r e d r e s s
once t s
o p e r a t i o n s
have
wound
d o w n .
Because h e
proposed
agreement
would
r e v e r s e
e s t a b l i s h e d p o l i c y
a f t e r
p r i v a t e
i n d u s t r y
has
a l r e a d y
committed
t o i t s
i n v e s t m e n t s , t
o p e r a t e s
i n r e t r o a c t i v e
f a s h i o n t o s t r a n d
t h e v e r y
i n v e s t m e n t s
t h e
f e d e r a l
government
has
encouraged
t h i
o u g h
S e c C i o n
253
and
~
p r o v i s i o n s
of
h e
Telecommunications
Act)
and ~ l i s e s
grave
c o n s t i t u t i o n a l
concern L i n d e r
P e p i n .
C e n t .
T r a n s ~ ~ ~ . Co. . Ne~v
York, 438
U.S.
1 0 4 , l07
1978),
and
c r . s t e r r z
F , n t e i
s . v .
A p f e l ,
524 U.S. 498,
22
-23 1998]
a
e g u l a t i o n may
o
r u s t r a t e
d i s t i n c t
i n v e s t m e n t -
backed
e x p e c t a t i o n s
a s t o
amount o
a t a k i n g ' ) .
Rather h a n
a v o i d i n g
t h e
c o n s t i t u t i o n a l
t a k i n g s
problems,
h e
C i t y
has
n t e r p r e t e d
t h e R e s o l u t i o n s
t o c r e a t e
t h o s e
problems
which
s
u n a c c e p t a b l e
under
clew
l y -
e s t a b l i s h e d law.
F o c i ~ - t
/ z
t h e
r e c o r d
p r e s e n t s
s e v e r a l
obvious
shortcomings
n
C i t y B r i d ~ e ' s
p r o p o s a l
n e v e r
a d d r e s s e d by
DoITT,
e n d e r i n g t h e C i t y ' s
s e l e c t i o n of
CityBridbe
~
and
capricious
e s p e c i a l l y
when t h o s e
numerous
a i l u r e s
a r e
c o n s i d e r e d i n
e o m b i n a t i o n . j
A s
an
n i t i a l
m a t t e r ,
t h e C i t y has
a i l e d
t o
u n d e c t : a k e
any
reasoned
e v a l u a t i o n of h e
r e s p o n s e s
t o
t h i s
RFP
by
a s s e s s i n g t h e i r
comparative s t r e n g t h s
and
weaknesses,
n c l u d i n g
such
c o i i c e i n s ~ s
p r i o r
f i n a n c i a l
p e r f o l m a n c e ,
consumer
s e r v i c e
e x p e r i e n c e ,
t e c h n o l o g i c a l
c a p a b i l i t i e s ,
o r
o t h e r
r e l e v a n t f a c t o r s .
The
i t y ' s l a c k
of a
reasoned e x p l a n a t i o n a s
t o
T i t a n ' s
p a r t i c i p a t i o n i s only
one
example
of h i s
wide- ~ i i l u r e .
S e c t i o n
1 0 . 6
of
h e
proposed
agreement
n s t a l l s
T i t a n
a s
t h e
managing
member of
h e
CityBridge
c o n s o r t i L l m , L ~ t t h e
C i t y
has ~ i i l e d
t o
e x p l a i n
ho w
t h a t
choice can
be
s q u a r e d
w i t h T i t a n ' s
documented
f a i l u r e
t o
comply
w i t h
i t s
o b l i g a t i o n s
under a n o t h e r
h i g h -
p r o f i l e
p u b l i c
contract: ne o r
a d v e r t i s i n g w i t h
t h e
M e t r o p o l i t a n T r a n s i t
A u t h o r i t y
(MTAj.
f t e r -
T i t a n
d e f a u l t e d
on t h a t
c o n t r a c t
w i t h MTA by
a i l i n g
t o
pay
about
20
i l l i o n o w e d o r
2009
and
2010 d v e r t i s e m e n t s ,
MTA
rew on
T i t a n ' s
bank
g u a r a n t e e
C f : R i g l e v .
D n i r ~ ~ e s ,
78 A.D.3d
1249, 1251 (3d Dep't
2010}
c o n s i d e r i n g
agency e r r o r s
c u i ~ ~ a ~ i l < i t i v e l y j .
8/10/2019 Objection to NYC Wi-Fi Payphone contract with CityBridge
6/7
~
I~
iSC
~N D U
I ~ I I
~ T
Lau
ra
Rin
gelhe
im, l
e r k
Dec
e mb e r
8, 20
14
P
ag e
6
t o
co ve
r
t h e
d
ebt and t e r
m i n a t
e d T i
t a n ' s
c o n t
r a c t . See
E
xh.
For
t
s p a
r t ,
i n
20
12,
h e
L
o s
Angel
es Co un
t y M
e t r o p o
l i t a n
T r a n
s p o r t
a t i o n
A u
t h o r i
t y i d e n t
i f i e d
T i t a n '
s c o n t r a
c t u a l
f
a i l u r e
i n
New
Y
o rk
a s a
weak
ness t
h a t
u
l t i m a
t e l y
c o n t
r i b u t e
d t o
t h a t
agenc
y' s c h o
i c e
o
f
a
compe
titor
o r
an a d v
e r t i s i
n g
c o n
t r a c t :
Ev e
n t
hough
T i t a
n
p
u r p o r
t e d
t o
o f f e
r
a
h i g h e
r f i x
e d
reve
nue
a
mo un t
, h e
ag
ency s t a f
f r e
c o g n i
z e d
t
h a t
[ t ] h
e g r
e a t e s t
r i s k
f a c t o
r i n
aw
ardin
g
Me
tro's
reven
ue- g e n e r
a t i n g
a d v e r
t i s i n g
c o n t r a
c t s i s
t h e
p o
s s i b i l
i t y
of h e s e l
e c t e d
v
endor
be
comin
g
unabl
e
t o
pay M e
t ro t s
g u
a r a n t
e e d r
e v e n u
e ,
an
d T
i t a n '
s t r a c k r
e c o r d
i n N
ew
Yo
rk
i n c r e a
s e d
t h a
t r i s k
.
S
ee E
xh. . B
ut h e
r e c o r
d d o
es
not d i s c l o
s e
any
s t e p
s t h e C
i t y
took
h
e r e
t o
a s s u r
e
i t s e l f t h a t T i t a
n wo u
ld n
ot e p e a t
t s
p r i o
r
w
e ak
perf
orman
ce,
r
t
h a t t h e
proposed
agreement
a s
a
g e n e
r a l
m
a t t e r
w i l l
be p r a c t
i c a b l e
ev
en
w h e n ane
co n o m
ic
d
owntu
rn
red
uces a d v e r
t i s i n
g r e
v e n u e
s .
T
his
a i l u r e
i s
a l l t
h e m
o re u r
p r i s i
n g
g i v e n
t h a t
T i t a n
c
u r r e n
t l y o
w e s
hun
d reds
o f
hous
ands
of o
l l a r s i n
f i n e s
and
p e n a l
t i e s
i
s s u e d
by
DoITT
f
o r
v i o l a t
i o n s of
En v
ironm
ental
C o n t r
o l
Bo a
rd
C o d
e s e c t i o
n s go
verni
ng
t
h e o p e
r a t i o n
o f
p
aypho
nes.
Se
e
EC
B
otice of i o l a
t i o n s
Dat
abase
,NY
C p
e n
Da
ta,
h t t p s :
/
/ d
a t a . c i
t
o~v
ork
us
C i t y -
Go
v e rn
m e n t l
ECB-
N
otice- o f
-
V i
o l a t i o
n s
/v6h5
~vss s e a
r c h
f
o r r e
c o r d s
w i t h
i s s u i n
g ag
ency Uo
ITT).
Amon
g
t h e r
r
e l e v a n
t f a c
t o r s , t h e
C i
t y has a l s o
f a i l
e d t
o c o n s i
d e r t h e
in
adequ
acy
of
h e
d
a t a
p r i v a
c y and
d a t a
s e c
u r i t y f e a
t u r e s
o f
i t
y B r i d
g e ' s p l a n .
C
ityBri
dge
s t r u c t
u r e s
w i l l
i n c l u
d e
US
B
o r t s
f o
r w i r e
l e s s
p h
on e
c h a r
g i n g ,
but
be
cause
25
e r c e n
t
o f
ma
lware
m
a l i c i o
u s
p rog
rams)
s
s p r e
a d tod
ay
thro
ugh
US
Be v i
c e s ,
t h e
r e i s
a p a l p a
b l e
r i s k t
h a t
such
a USB
p o r t
w i l l
be
e x p l o i t e d t o
d i s t r i b u t e
malware
t h a t
co uldm i s a p p r o p r i a t e
p r i v a t e
i n f o r m a t i o n
s t o r e d
o
n
a
co n
nect i
ngsm a
rtpho
ne,
such
a
s h e
p e r s
o n a l
ba n
k a
ccoun
t
n um
bers
or
o t h
e r
p r i v
a t e
or
s e n
s i t i v e
d
a t a .
See
Ex.
K
Fu rthe
rm ore
, i t
a n ' s t r
a c k r e c
o r d
o n d a t a
p r i v a
c y
c o n
t a i n s
a
e c e n
t and
unde
niabl
e
b
l e m i s
h : P u b
l i s h e
d
r e p
o r t s
i n
Octo
ber
2
014
i s c l o
s e d t
h a t
T i t
a n
h
ad
p
r e v i o
u s l y
i
n s t a l l
e d o n
ma
ny o f
t s
t
e l e p h o
n e
bo oth
s
s o -
c a l l
e d
be
acons
h a t
a c
q u i r e d
u
s e r
d
a t a
n
c l u d i
n g
what
w
e b s i t e
s t
h e y v i s
i t e d
o n
t h e
i r
sm
art ph
ones.
See
Ex. L.
Not
ably,
l t h o
u g h DoIT
T
allow
ed
T i t a n
t o
i n s t a l
l
t h e
d
e v i c e
s i n 5
h o
n e
boot
hs
thr
ougho
ut Man
hatta
n
witho
ut
any
f
ormal
a p p r o
v a l p r o
c e s s
becaus
e
t
h e
co
m p a n y
s
a i d
i t
w
as
u
s i n g
t h e m
f
o r
ma
inten
ance purp
ose s
o
n l y , T i t
a n
ac
knowl
e d g e
d t
was
u s i n g
t h e
d a t a
f
o r
n o n-
mai
ntenan
ce pur
poses
a
s w e l l
. See d .
T
i t a n '
s a c c e s
s t o t h e
d a t a
a c q u i
r e d
thro
ugh
t h
e
beaco
ns
r
a i s e s
t r
o u b l i n
g
q u e
s t i o n
s
wh
ether
t
was
a b
l e t o
e x p l
o i t
t h
a t
d a
t a i n
p
r e p a r
i n g t h
e
CityB
ridge
p
r o p o s a
l . A d d
i t i o n
a l l y ,
t h e
C i t y
gav
en
o e x p l a
n a t i o
n i n
r e a c h
i n g
i
t s
d
e t e r m
i n a t i o
n o n
t h i
s RFP how
t
woul d
p r e v
e n t ar e
c u r r e
n c e
of su
ch
a
d a t a
p r i v a c
y mi
shap .
Fu
rther
more, h e
C i
t y ' s ro
sy
c
h a r a c t
e r i z a t
i o n
of
i t y B r
i d g e ' s
p l a n s
has g l o s
s e d
overe
v i d e n t
p r a c t i
c a l
p
roble
ms t
h a t t h
o s e p l a n
s
f
a i l
t o
a d
d r e s s
. I
n p a r t i
c u l a r ,
t h e
C i t y
d i d
not
a d d r e
s s
t h e
c r i
t i c a l
r
o l e t h a
t
e x
i s t i n g
p ayph
o nes
hav
e p
l a y e d
i n
a l l
o w i n g
New
ork
ers t o
co m
munic
at e
du
ring
emer
gencie
s.
F
or exam
p le,
u r
i n g
t h e
Augus
t
2003
l a c k o
u t and
p owe r
o u t
a g e s
fo l
lowing
Hu
rrica
ne
Sa
n d y,
ay
p hone
s
o n t
i n u e d
t o o
p e r a t
e be
cause
t h e y
r e c e i v
e e l e
c t r i c i
t y
8/10/2019 Objection to NYC Wi-Fi Payphone contract with CityBridge
7/7
G
I~S
01
~
~
UN
I~
1
La
ura
Rin
gelh
eim, lerk
De
ce mb
er
8, 2 1
4
P
age 7
t
hrou
gh
t
h e tel
ephon
e
i n
e anddo n
ot
e q
u i r e
e x
t e r n a
l p o we
rsou
rces
t o
co mp
lete te
lepho
ne
c a l l s
. Bu
t
h e
Ci
ty
m
ade
n o
i
n d i n
g s t o
sho
w t
h a t
C
ityB
ridge
s p l
an s
acco
unt
o
r
such
r e
a l i t i
e s .
Ci
tyBri
dge
s t r u
c t u r e
s , f o r
exa
mple
, i l l
have
x t
e r i o r
alum
inu m
w
a l l s ,
wh
ich
e
xperi
ence
t
eache
s
w i l l
not
en
dure e
xpos
ure o
elem
ents
and
s t r e
e t us
age i n c
l u d i n
g e
xpos u
re
t o
s n
o w,
i n t e r
s t r e
e t
s
a l t s
andp e
t
waste
s,
mon
g
t h
e r
t h i
n g s .
Tha
t s
w
hy h e i n d
u s t r y
aba
ndon
ed
al
u min
um
as a
t a n
d a r d
m a t
e r i a l
i n
199
7 and
now
r
e f e r s
s t a i
n l e s s
s t e e l .
A d d
i t i o
n a l l y
,
C
ityBr
idge
h
as t a
t e d
t h a t v
i s i t o
r s
w i
l l
b
e b l
e t o
ch ar
ge
h e i r
w
i r e l e
s s p
hone
s
by p l
uggin
g
n t o
o p e
n USB
o
r t s
i n t h e
s t r
u c t u r
e s ,
but
h e
Cit
y ha
s
e v i
d e n t l
y
not
addr
essed
how
hos
e o p
en p o r
t s
wou
ld
cont
inue
t
o f u n c t
i o n
a f t
e r
ex
po su
re t o
we
athe
r
el
emen
ts
or
f t e r
vandalis m(s uch as
n s e r t i o
n
o f
e b r i s
i n t o
an o p e
n p o r t
. N
or i d
th
e
Ci
ty
add
re ss
t
h e
a
c c e s s
i b i l i
t y
p r
obl e
m
s
t e m m
i n g fro
m
CityB
ridg
e s p
lan t o
o m
it
han
dset
s f
ro m t s
s t
r u c t u
r e s .
The n
r e a l i s
t i c
ass
umpt
ion beh
ind
t h
a t as pe
ct
o f
h e
p
lan
app
ear s
o
b
e
h a t u
s e r s
w i l
l s up
ply
t h e
i r own
qu
ipme
nt
o r
t h a
t purp
osebu
t
h e r e
i s
n o
evide
nce h
a t a l
l
m
e mbe
rs
of
h
e
p u b
l i c
a r e
prep
ared
t o
do
s
o .
Take
n
as
a
w
hole
,
h e
ev
iden
ce
bef
ore
t
h e
C
ity
d i d
n
ot
sup
port
i t s
d
e t e r
m i n a t
i o n ,
a
nd t f
a i l e d
t o g
ive ar
eason
ede
x p l a n
a t i o
n o f
h a
t
d e
t e r m i
n a t i o
n .
C
onti
nuing
e l i
a b l e
p ay p
ho ne
e r v
i c e
and
wide
ning
Wi
- F i
a c c e s
s a r e
imp
orta
nt, but
h e
prop
osed
ag
reem
ent s
n s t a l
l a t i o
n
o f
a
i n g l e
m
o no p
o ly r a n c h
i s e brea
ks
a d i c
a l l y f
ro m
t h e
s e t t l
e d
un
derst
andi
ng
h a t
comp
etit
ion i n
t h e m
arket
plac
e
s
v i
t a l f o
r c
o ns u
mer
e l l
-
b e
i n g .
I f
appro
ved,
h
e Ci
tyBri
dge
arr
ange
ment
i l l
send
t h e
wro
n g i
g n a l
a
bout
h e
o
p enn
es s of
New
Yo r
k
Cit
y
t o
c
ompet
itiv
e
f o r c e
s , d
iscou
ragi
ng inv
estme
nt by
c
omp a
nies
f
f e r i n
g ne
w
tech nology notonly
n
the
Wi
- F i
and
w i r e l e s s
co mmunication s
product markets but
p o
t e n t i
a l l y
i n o t
h e r
a
r e a s
a s
w
e l l .
DoI
TT s
RFP
nd t s
de te
rmina
tion
t h a
t
C
ityBr
idge
sh ou
ldbec
o m e
th
e e x c l
u s i v e
p r o v
i d e r
of
p u b l
i c p a
y p ho
ne
e r
v i c e i
n t
h e
Cit
y
a r e
r i f
e
wi
th p r o
c e d u
r a l
and
s u b s
t a n t i
v e f l a w
s .
Th
e
p
roper
co
urse
o r t
h e F
CRC
s t
o
co ndu
ct u
r t h e r
f a
c t
f i n d
i n g
an
d e g a l
revi
ew o
f h
e s e
an
d
o t h e r
flaw
s,
an
d
t o
h
ave
u r t
h e r
i n
v e s t i
g a t i
o n cond
ucte
d
h e
r e ,
r a
t h e r
t
han
r
ush
t o
judg
ment
by
appr
ovin
g
t h i s
i l l
co n
ceive
d pro
pose
d agr
eeme
nt.
R
e s p e
c t f u l
l y ,
Ra
ndy
M
a s t
r o