April 28, 2010

Metro-North selects team of national wireless carriers

The Metropolitan Transportation Authority's (MTA) Metro-North Railroad (MNR) is requesting approval for a License Agreement with a team of national wireless carriers to construct a state-of-the-art, multi-carrier wireless commercial network that will provide wireless (cellular) service to customers in Grand Central Terminal (GCT), the Platform/ Trainshed area and the Park Avenue Tunnel.

In addition, the system will provide Wi-Fi services for GCT and the platform/trainshed area, and the team will build a stand-alone, internal radio communications network for MTA use, including public safety and first responders. All will be at no cost to the MTA.

The team of carriers, which was selected through a competitive process, consists of Verizon Wireless, Sprint Nextel, AT&T and T-Mobile.

The agreement would improve the MTA's internal communications capabilities to support the MTA Police Department and other emergency service responders who wish to participate, such as the New York City Fire Department. The carrier team will design, construct and install, at its own expense, a stand-alone wireless radio services communications network for the exclusive operation by MNR and, upon completion and acceptance, this internal network would become its property.

Under the License Agreement, MNR estimates it will receive $24.3 million in benefits, with no cost to the railroad. More specifically, the carrier team will bear the capital cost of the commercial wireless system, the MTA's stand-alone radio system for its internal use and provision of 48 strands of spare fiber optic cable and conduit. The team also will pay MNR an annual license fee, with an annual escalation clause for the initial 10-year-term, with two, five-year renewal options.

In addition, MNR will receive all revenue generated by sublicenses to Wi-Fi service providers, less administrative costs, with a guaranteed minimum dollar amount per year. The MTA estimates the value of the license fee arrangement alone over the 20-year maximum term at over $4 million.

The proposed License Agreement was approved today to the Railroads Committee of the MTA. The full Board of the MTA is expected to vote on the agreement at its monthly meeting.

This License Agreement is a completely independent project from the recent Request for proposals issued jointly by Metro-North and the Long Island Rail Road for Wi-Fi service on board trains and throughout their suburban operating territories, and will not preclude implementation of Wi-Fi on trains. Proposals on that project are due May 17.

The License Agreement calls for construction completion of the commercial and MTA internal networks approximately three years after selection of the key vendors/contractors.

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