Here is an excerpt from the appendix of Sidewalk Labs’ proposal for the Sidewalk Toronto project, Quayside. Emphasis mine.

“Building new neighbourhoods from the internet up is a remarkable opportunity to embed emerging digital capabilities into core infrastructure from the start. Physical spaces like buildings, streets, and parks can be designed for the opportunities that technology present, rather than forced to retrofit new advances very slowly and at great cost. By merging the physical and the digital into a neighbourhood’s foundation, people are empowered with the tools to adapt to future problems no one can anticipate. Such a place quickly becomes a living laboratory for urban innovation. Given the speed of technological change, cities will only meet their growth challenges if they support innovation not right now but 10, 20, and 50 years ahead. To do so requires designing for radical flexibility, enabling the best ideas to be refined in real time and creating a cycle of ongoing improvement driven by the feedback of residents and the energy of entrepreneurs, rather than prescribed by planners and designers.”

This methodology is big tech’s speciality. Embed itself in cultural norms, deliver straight to residents, profit. We don’t need to speculate on how the digitization of cities might go when these intentions are in plain sight.

This past week, the City of Toronto released its first staff report on the Sidewalk Toronto project. Based on the report, it’s a good thing Deputy Mayor Councillor Denzil Minnan-Wong took the step in December to move the project into full view of Council. It’s also clearer than ever that the contract between Sidewalk Labs and Waterfront Toronto should be released in full.

The way this project is unfolding raises governance flags, particularly around procurement. And to be clear, this is not to suggest that anything being done is in contravention of any laws. This is a story of what happens when we don’t have policy and laws to guide innovation that we don’t understand. It’s the precarious vacuum we’re in, with talk of innovation, jobs, and privacy obscuring the underlying and troublesome narrative of an R&D project that no one in Toronto signed up for, let alone agreed to contribute their data to. But back to procurement, let’s start there.

Sidewalk Toronto is a joint venture formed between Sidewalk Labs and Waterfront Toronto. Its mandate is to deliver a plan to develop Quayside. But nestled within this mandate, which is essentially one of an investor, sits another role: that of a vendor.

Sidewalk Labs is concurrently an investor and a future vendor of products created through its investment. This structural oddity was created in the RFP from Waterfront Toronto. In the RFP, there are several references made to the successful bidder’s ability to invest in pilot projects on the eastern waterfront, specifically pilots related to transportation and sustainability.

The RFP also speaks to the intellectual property that will be generated through these pilot projects. From the RFP: “The Partner [Sidewalk Labs] has the opportunity to participate in traditional financial/revenue benefits from real estate transactions as they become available. In addition, we foresee significant revenue generation and sharing potential from the Intellectual Property (IP) derived from Project.”

Not once does the RFP talk explicitly about pilot projects in the City of Toronto proper, at most it talks about the eastern waterfront, or makes vague reference to scaling ideas. But it appears as though pilots for the rest of the City are on the table now. From the staff report, emphasis mine:

“An important component of the Sidewalk Labs response to Waterfront Toronto’s Request for Proposals is the proposal to pursue pilot projects in Quayside. City staff are supportive of this idea, and are of the view that pilot projects could be undertaken in other parts of the City as well. Pilot projects should be characterized by a commitment to open data. Also, pilot projects should build on, and not duplicate, relevant City initiatives. The evaluation of any successful pilots would include evaluation of opportunities to implement at scale. Given that City [sic] has no contractual relationship with Sidewalk Labs, and given that the City must be fair to other potential partners/vendors, City staff prefer that pilot projects be implemented on a non-exclusive basis, meaning that these pilots would not preclude any other technology company from pursuing a pilot initiative with the City of Toronto. There may also be opportunities to invite other technology companies to participate in pilots led by Sidewalk Labs and Waterfront Toronto.”

In this statement, the City appears to be approving of pilot projects outside of Quayside while at the same time admitting that there is no accountability mechanism (a contract) in place with the City of Toronto to manage them. The report then goes on to invent a possible procurement process for others to participate in these pilot projects, one meant to address the anti-competitive nature of the approach. It talks of inviting other businesses to participate in test projects being driven by a potential vendor, not the City.

Further in the report is more specific staff approval of the scope creep that would live outside of any contract with the City: “Sidewalk Labs has articulated a desire to test technologies in other parts of Toronto as well. In many cases, these pilots would have the potential to support and advance existing City initiatives, such as the Toronto Green Standard and Big Data Innovation projects.”

The report goes on to explain that “City staff will work with Waterfront Toronto and Sidewalk Labs to refine and advance proposals as appropriate in order to implement and build upon relevant City initiatives, rather than duplicating or conflicting with them. The evaluation of pilots will include analysis of opportunities to implement at scale. Early pilot projects that have been proposed by Sidewalk Labs include an autonomous vehicle shuttle, on-street parking pilot, and waste disposal chute technology.”

From the report, we also finally see the itemized list of expected expenditures for the $50 million. They are:

• Plan development; • Third party expert consultants; • Public and stakeholder engagement;
•  Applicable overhead costs • Pilot projects

A monthly public accounting of how this money is being spent would be helpful to understand the ratio of investment and what that money is buying.

Our policies and laws that govern data are out of date. They cannot be the mechanisms that oversee the types of tech development we’re talking about with this deal. There will be possible implications for how we deliver public services. We don’t have a digital infrastructure and data policy, one that considers government ownership of critical infrastructure at the hardware (sensor) level. One that ensures innovation of the broadest possible definition will be supported. This isn’t about stopping innovation. It’s about doing it in a way that supports an intentional and well-thought out inclusive approach to innovation, ensuring appropriate valuation and control of vital public goods.

The staff report highlights key issues and uses many of the right words. It does, however, makes the unfortunate and persistent error about privacy being the core issue with our data. It’s not. The core data issue is the value of our aggregate data and the implications of its use on public service delivery.

But otherwise the report does a good job of speaking to processes that will be happening on the fly. It is clear about the many areas that are poorly understood within the context of this deal, and the need for broad and intensive public consultation. It speaks to complexity and the lack of appropriate regulation, and suggests several ways to mitigate these issues. All in all, it’s a good report.

The problem is that for all of its strengths, the report concludes that we are going to be co-creating governance and accountability mechanisms with a vendor.

“Waterfront Toronto has committed to work closely with Sidewalk Labs on the policy and accountability frameworks that are required to address concerns such as data ownership, privacy, and the ethical use of technology and collected data.”

The report also states that this co-creation of policy and regulation with a vendor will be a good thing because we’ll need it in the future anyway. This is another step that enables big tech’s influence on public service delivery and democratic process. As far as process flags go, it’s a big one.