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According to a report in the Chicago Tribune dated August 1, 2006, initial tests of Redflex's technology demonstrated to city officials that a single camera could generate as much as $13,140 per hour for the city. It is therefore no surprise that OEMC has awarded Redflex with a five-year, $52 million contract extension that calls for up to 220 new red light camera intersections. Under the original contract, each installation ran at a cost of $100,000 to the city. Under the new contract, for which Redflex was the lowest bidder, Chicago will pay $24,500 per installation. Doing some quick math based on the numbers above, the cost to install and maintain these new cameras should be recovered in less than a day.
Doing the math also begs the question – to what purpose is the rest of the money applied? Two-hundred twenty cameras at $24,500 each only adds up to about $5.4 million. That leaves about $46.6 million that isn't accounted for by camera installations. OEMC's fact sheet mentions that the new contract will continue to allow motorists to access evidence – i.e. photos or video – of their infractions online. But $46 million seems like a steep price for Chicago to maintain what is essentially a private YouTube for traffic violations. OEMC claimed to be uninformed regarding the technical intricacies of the Redflex solution. The Department of Revenue similarly did not have much visibility into its inner workings. April Lynch of the FKM Agency, which operates as Redflex's public relations agency of record, said that she was not able to find a Redflex expert that was available to answer our questions.
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Remember, neither the city nor Redflex managed to reveal which telecom supplier is actually providing the connectivity on which the red light cameras rely to do their jobs. |
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spokeswoman, Jennifer Martinez, Redflex provides the city with a turnkey service. Though neither could confirm the precise details, evidence points to a scenario where Redflex contracts directly with telecommunications providers for the connectivity and bundles it in as part of its end-to-end application.
Telecom is Missing Out
Here's where the real travesty for the telecom industry comes to the forefront. A small company from Australia wins a $52 million contract with a major U.S. city to supply what are essentially telecommunications services and applications that generate revenue. Redflex didn't invent digital cameras, motion detection technology, databases, websites, or network connectivity. But they did manage to put all of these existing technologies together into a tidy package while cutting major telecom players out of the big money. Isn't this the kind of innovation and segmented service packaging the entire telecom industry has been talking in circles about for the past several years? Congratulations telcos, you just had your hat handed to you by a start-up company that's growing like a California wildfire.
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This leaves us to our own suppositions, based on an extensive knowledge of telecommunications networks and associated applications. The camera systems and back end servers need to be maintained, monitored and repaired. Further, someone needs to monitor and pay for the connectivity between the cameras and the back end. According to the Department of Revenue's Walsh, and corroborated by OEMC's
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AT&T is the big dog in Chicago when it comes to telecom, but its getting little more than table scraps – if that much - in what turns out to be a windfall for both Redflex and the city. Remember, neither the city nor Redflex managed to reveal which telecom supplier is actually providing the connectivity on which the red light cameras rely to do their jobs. This author suspects that the city's
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