A multi-million-dollar New Orleans project to close the digital divide and boost economic development has been controversial and has been canceled this week. What could be wrong?

In April of last year, the City of New Orleans issued a Request for Proposal (RFP) for broadband connectivity and smart city solutions with the goal of improving services, stimulating economic development, and bridging the digital divide. Among certain communities, up to 4% of households did not have internet access.

The city selected the Smart + Connected NOLA Consortium as the winning bidder. The consortium includes JLC Infrastructure, an investment firm co-founded by Qualcomm, Jacobs Engineering and former professional basketball player Earvin 'Magic' Johnson.

Earlier this month, Mayor Cantrell worked with Johnson to promote a smart city project at a community venue.

But just weeks later, a congressional investigation into the bidding process is underway and the consortium withdrew, citing "significant uncertainty surrounding the project's future".

The city is now back on track and plans to run the RFP process again.


What went wrong?

The multi-year proposal of the Smart+Connected NOLA consortium demonstrates a public-private partnership model with no upfront costs to cities that is “cost-neutral” through savings and returns. These included “city-facing” internet networks, smart street lights, smart traffic management and Wi-Fi kiosks. It also included a range of monetization data such as revenue-sharing models through connected services, kiosk advertising revenue, and traffic sensors.

Late last year, the city council raised questions about data privacy, costs, how the project would extend low-cost internet access for free, and potential conflicts of interest related to smart city consultancy Ignite Cities in partnership with the Cantrell administration. It is based on Pro bono and also has partnerships with the winning consortium, Qualcomm and JLC Infrastructure.

The city dismissed a complaint from Cox Communications, which had bid for the RFP. The city has no contract with Ignite Cities and said the company is not an official member of the Smart+Connected NOLA consortium and has no economic interest in RFP.

The situation has only gotten worse after a series of reports from The Lens, a non-profit research news publication from New Orleans, recently.

On April 4, the New Orleans City Council subpoenaed Jonathan Rhodes, director of public facilities in the mayor's office, to share documents related to the bidding process and ordered him to attend an April 11 meeting of the city council. City Council President Helena Moreno was concerned about the “overall lack of transparency” and “possible contract manipulation” about the project.

Concerns were further heightened when it was revealed that Rhodes and other city officials had also provided outside consulting, including Qualcomm, with respect to requests for information issued by the City of Los Angeles.

City Council has voted to start a full scrutiny of the New Orleans RFP bidding process and to block the city's proposal to proceed as a one-year pilot for a smart city project rather than a multi-year contract. The former does not require parliamentary approval.

In testimony from yesterday's city council meeting, Rhodes said that Verge Internet, a Delaware corporation founded by him and Christopher Wolff, a member of the city's IT department, had only provided free services to promote digital equity and had no staff. , revenue or compensation.

As the situation worsened, the Smart+Connected NOLA consortium was pulled from the project on Monday.

“Unfortunately, due to significant uncertainty surrounding the project's future, the SC Consortium is unable to proceed with the project under these circumstances,” the statement said.

The group said it would cooperate with requests for further clarification of the open bidding process.


what's the situation now?

The council is conducting an investigation.

Moreno tweeted: "It is regrettable that the potential for bid rigging and other lack of transparency have delayed efforts to make it cheaper and better for residents to access the Internet. We will investigate and seek accountability to ensure that our future efforts are successful.”

At the April 4 hearing, City Councilman Freddie King III asked Rose if she could see “how this looks in public, how bad this looks.”

Rhodes could, but added: “It's a subtle situation. "I don't think there is any unethical behavior, but I think I understand why you're being asked."

A New Orleans spokesperson told Cities Today that the pandemic has highlighted New Orleans' digital divide, and black New Orleans and low-income residents are most affected by lack of access.

“As the pandemic escalated, our administration had to take action,” they said. “In 2020, we published a notice asking potential partners to express interest in addressing digital equity issues. In 2021, with students still learning distance, these conversations led to the publication of the Smart City RFP, asking partners to build fiber optic infrastructure and provide free, affordable internet to the most vulnerable communities.

“Smart + Connected NOLA (SCNOLA) generally scored the highest because the solution is cost-neutral. It is worth noting that the Cox proposal will cost the city more than $1 million.”

“We are deeply disappointed with SCNOLA's decision to withdraw its consideration. This is not surprising given the contentious atmosphere surrounding this issue. This is a detriment to the children who deserve better city leaders.”

“In the future, we will reissue the RFP. The need still exists. We welcome anyone with a solution to work with us.”

This may not be as simple as Cox now claims that it should automatically sign a contract with the second highest bid.

Cities Today solicited input from members of the Smart+Connected NOLA consortium and Ignite Cities.


☞ Cities Today (2022.04.28.)