A controversial deal that brought wireless internet service to O’Hare and Midway airports will be extended five years, setting the stage for a possible city takeover of the service.
The City Council’s Aviation Committee authorized the extension of the city’s license agreement with the Chicago Concourse Development Group on Monday.
“The ordinance will allow for new investment, increased airport revenue and, importantly, it will provide the Chicago Department of Aviation with the time it needs to comprehensively research the feasibility of taking ownership of the Wi-Fi systems at both of our airports,” Aviation Committee Chair Matt O’Shea (19th) told committee members before the vote.
Twelve years ago, the Chicago Sun-Times reported that Patrick Daley, son of now former Mayor Richard M. Daley reaped a $708,999 windfall when Concourse Communications, the airport internet provider chosen by his father’s administration, was sold in 2006 at a 33% profit — less than a year after signing the multi-million-dollar Wi-Fi contracts.
When Concourse fulfilled a city requirement to disclose its investors to the city, Patrick Daley was not one of them. But the Sun-Times subsequently learned Patrick Daley had acted as a middleman who lined up investors for Concourse.
The company better known to air travelers and airport employees as Boingo, collects fees from passengers who use airport Wi-Fi and fees from airlines, concessionaires, federal agencies and cellular carriers for the use of in-terminal cellular infrastructure. It also collects fees for advertising sold on its website.
Over the last few years, the city has received an average of $2.3 million in annual licensing fees.
The five-year extension is expected to generate up to $11.5 million in additional revenue for the city over the next five years, said Aviation Commissioner Jamie Rhee. The extension will allow the company to spend “up to $2.5 million” to upgrade Wi-Fi infrastructure at both airports.
“Data usage on the Wi-Fi network in our terminals has increased over 70% over the past three years. Without upgrades, the system is at risk of failure,” Rhee told alderpersons.
“Between the additional revenue and the investments made by Boingo, the value of this extension for the city reaches up to $24 million over the next five years. Without it, Boingo would not be in a position to make these upgrades, and that would make the system at Chicago’s airports at increased risk for decreased system reliability or overall system failure, which could hamper airport operations.”
• The Aviation Committee also authorized Rhee to renew concession contracts at O’Hare “on a limited basis” and extend concession agreement at Midway for three years.
“All of this prepares Midway to complete the revamp of its concessions over the next year. And it ultimately allows for the re-bidding of all concession space at O’Hare’s Terminals 1 and 3 and to ensure a positive passenger experience continues as construction on the terminal area plan gets underway,” O’Shea said.
• Also on Monday, the Committee on Workforce Development took testimony from business and labor at odds over the language of a proposed paid leave ordinance, then adjourned until Thursday. That will give the two sides more time to reach a compromise.
During a recess Monday, Committee Chair Mike Rodgriguez (22nd) said the “right to private action” that allows employees to sue their bosses was pushed back six months, until July 1, 2024.
“We were ready to vote today on a good ordinance. We have an opportunity here to make it even better over the next couple of days,” Rodriguez told reporters after the meeting.
