As Cox subsidiary takes over Las Vegas Convention center telecom services, legal fight continues

A local subsidiary of Cox Communications will take over all telecommunication services as scheduled Sunday at the Las Vegas Convention Center, but the legal battle over how it obtained the contract will continue.

At a Friday hearing, Clark County District Judge Mark Denton allowed Cox to finish the job of installing its hardware and putting its people in charge of running the center’s technology, including TV, landline phones and computer links, Wi-Fi and cellphone service. In doing so, it will displace Las Vegas-based Smart City Networks, which has performed the work since 1998.

However, Denton ruled that the contract would remain in a transition phase even though the physical transition would be complete, keeping the situation frozen until another Oct. 8. hearing. At stake is a deal that will run seven years, with an option to go a full decade, and range in value from an estimated $70 million to $100 million.

Smart City based much of its in-court argument on technical points, but the broader case laid out in court papers accuses the Las Vegas Convention and Visitors Authority of conducting “a deeply flawed advertised competitive bidding process.”

The authority’s decision last year to seek outside bids for the job culminated in the board of directors selecting Cox Nevada Telecom LLC as the winner at an Aug. 13 meeting. The authority staff wanted to see what the market would bring them, given the changes in technology over the past 15 years.

As part of the winning bid, Cox and wireless partner DAS pledged to spend $22 million on new hardware plus pay the authority a 46 percent commission on the revenue it generates from selling the connections to conventions. Because the authority structured the process as a proposal rather than a bid, the three companies that tried for the job were scored on several subjective factors such as management, customer service and experience, as well as price.

According to authority management, Cox came out slightly ahead of Smart City on the point totals, while AT&T was a distant third. Cox also finished first from the financial standpoint, in the authority’s analysis. However, Smart City contended that the scores contained errors that caused them to finish second. The sides dispute whether the numbers were ultimately corrected.

Further, Smart City said Cox was allowed to match its commission of 46 percent after initially proposing only 41 percent. Smart City also cited several testimonials, some from authority board members, to back their claim that they had done exemplary work for 15 years.

“Smart City had every reason to believe it would be treated fairly by the LVCVA staff evaluators in an competition for future work at the convention center,” attorney William Maupin wrote.

Smart City said it tried to place a protest on the authority’s September agenda, backed by a $250,000 bond. But authority attorney Todd Bice said Nevada law does not allow any protests.

Even though Smart City has pulled its equipment and staff of 40 from the convention center, it still hopes to regain the contract or damages for losing it.

Contact reporter Tim O’Reiley at 702-387-5290 or at toreiley@reviewjournal.com.