Carriers Balk At NYC Subway Buildout Costs

Fri, Jan 13th 2006 1:53pm — Carlo Longino

New York City's Metropolitan Transit Authority has been trying to move ahead with plans to extend cellular coverage to the city's subway, soliciting bids back in August. The MTA's since had to push the deadline for bids back three times thanks to a chilly response from carriers, who don't seem to be convinced that it's in their interest to build the underground network. As part of the RFP, the MTA stipulated that whoever builds the network must allow open access to all carriers, though it could charge for that access, and would have to pay rent to the MTA. With those conditions, carriers are balking -- particularly since the network wouldn't generate much additional revenue for them, since few people pay per-minute charges on their cell phones and draw from monthly buckets of airtime instead. Although there's a possibility the nation's four major carriers may band together for the project, it's far from a sure thing. Some analysts say the situation merely reflects carriers' ambivalence to improving service that won't generate additional revenues, and given all the money they've been spending on high-speed data networks on which to sell overpriced services, it's not hard to believe that point of view.

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Peter, 13 Jan 2006 @ 1:53pm

Norway has had this for years
Goto Oslo airport and then tae the metro into town, it starts above ground and then disappears into a tunnel and then under Oslo. All the while every operator shows a full 5 bars on your handset and you can watch CNN on the TV in the carriage!!! And the US is supposed to be technically advanced.
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pw, 13 Jan 2006 @ 1:53pm

Carriers Balk At NYC Subway Buildout Costs
Carriers balk when a per use when tunnel bond is in effect. All above ground tower expense is per month lease and equipment capex both a fixed expense. Not usage billed by tower owners. I would think that the MTA would jump at this for a reason for ridership to ride the MTA, without charging carriers a per use cost. Thirdly the networks switches are so dumb so they claim they would not be able to monetize or send usage activity for payments to MTA. This would set a precedence of usage payments to third party’s for tower network overhead which they will not let anyone into there rev stream. an accounting nightmare you see.
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