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13 November 2019

Alphabet suffers smart city setback as Sidewalk scales back in Toronto

Alphabet’s Sidewalk Labs has massively scaled back its plans for its smart city development in Toronto, from 190 acres to just 12 acres at Waterfront Toronto. Still dependent on a public consultation, this setback shows the critical importance of quicker, streamlined city approvals to enable any kind of wireless infrastructure for smart cities.

Sidewalk CEO Dan Doctoroff said he was “encouraged by the decision by the Waterfront Toronto board and are pleased to have reached alignment on critical issues with Waterfront Toronto”. But the citywide project could still be scuppered by municipal rejection, encouraged by a public campaign run by a group named Block Sidewalk.

Nonetheless, the board of the Waterfront Toronto – a group set up by the national and local Canadian government – has agreed unanimously that Sidewalk’s revised plan can move ahead to the evaluation and consultation stage, after raising concerns with the initial proposal.

The most significant change is the death of the ‘Urban Data Trust’, the most contentious part of the initiative, which proposed storing all the smart city data inside a central trust. But suspicion of the possible motives of Google, fellow Alphabet subsidiary, in using this data, meant this approach to processing and storage was a element Sidewalk had to abandon.

Not having some sort of data trust would be a missed opportunity. Data marketplaces represent a major opportunity in the IoT, and with such an extensive smart city project, and one that could tap into all manner of other systems in Toronto, the city could have had a world-beating platform on which to build other applications.

Now that the project has been rolled back to just 12 acres, for now at least, the scope has been greatly diminished. Sidewalk could still lay the foundation for a city-wide data platform, but the public consultation could just as easily shoot down the proposal entirely.

Also notable is Sidewalk’s own decision to step down as the lead developer, with the company now planning on partnering with real estate developers for specific elements. In giving up this chief coordination role, Sidewalk likely hopes that it will not be seen as such a central figure in the process, which might help with the public perception of Google’s role.

The Overview of Realignment to Sidewalk’s Master Innovation and Development (MIDP) proposal outlines the changes made. In it, Waterfront Toronto says that it has told Sidewalk that the concept of the 190-acre (0.3 square-miles) IDEA District is premature, and that it must see its objectives achieved in the 12-acre Quayside development, before it could consider expanding the footprint.

A section on digital governance and privacy also requires that all personal information shall be stored and processed in Canada – data generated here must, it says, be treated as a public asset.

There is also a clause that Sidewalk will offer a global patent pledge to let Canadian ‘innovators’ use all of Sidewalk’s patents, with the public sector entitled to a “revenue stream on products and services piloted in Waterfront Toronto-facilitated testbeds”.

Doctoroff said: “We want to be a partner with Waterfront Toronto and governments to build an innovative and inclusive neighborhood. After two years in Toronto and engaging and planning with over 21,000 Toronto residents, we are looking forward to the next round of public consultations, entering the evaluation process, and continuing to develop a plan to build the most innovative neighborhood in the world. We are working to demonstrate an inclusive neighborhood here in Toronto where we can shorten commute times, make housing more affordable, create new jobs and set a new standard for a healthier planet.”

It would not be a surprise if Sidewalk quietly dropped the project. There was a Silicon Valley confidence that its systems would be welcomed into cities with open arms. Instead, in the post-Cambridge Analytica world, the public has become somewhat hostile to ulterior motives related to surveillance and the commercial use of the data they generate.

A final vote from the Waterfront Toronto board is due in March 2020, after which, public consultation will take over. In the current guise, the plan will ensure that Sidewalk follows all the data and privacy laws, participates in proper public procurement bids, and does not act as a lead developer, all inside the much smaller Quayside plot. It is not even allowed to make mention of the IDEA District anymore.

Doctoroff has changed his tune on the essentiality of the IDEA District. Back in June, he told The Financial Post: “We do not believe that just at the scale of Quayside, that Waterfront Toronto’s priority objectives can be achieved. Speaking to the same outlet this week, he said “maybe this is from your perspective parsing things a little bit, but let me give you an example of how going forward and what I said last time can be reconciled. We do not believe we can do that at the scale of Quayside, so we will not have achieved their objective.”

Nonetheless, the project might just still go ahead. Ontario’s premier Doug Ford said: “By focusing the Master Innovation Development Plan on the 12-acre Quayside parcel, ensuring that the land was valued at a fair market price and that the privacy of data collected on the site is protected, the right balance has been struck between protecting the interests of the people of Ontario and encouraging investment, innovation and economic development.”