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NYC Orders Ad Firm to Remove Tracking Beacons Installed in Public Phone Booths The city initially gave the ad firm its approval to install tracking beacons in old-fashioned phone booths but reversed course when the public was made aware of the project.

By Laura Entis

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

It's easy to forget that the city still has payphones – which is probably why, in March of last year, New York City held a 'Reinvent Payphones competition,' where designers, students and urban planners proposed ways to transform the payphone into something pedestrians would actually use (you know, for purposes other than taking a leak).

There were six winners in all, including a design submission that replaced phone booths with kiosks equipped with touch screens, so that passers-by could not only make calls but also get directions and look stuff up online. The proposal came courtesy of Control Group and the advertising firm, Titan.

While Titan's design proposal for the future of phone booths was a success, one of the company's more recent projects, concerning phone booths circa now, has proven to be a real hang-up.

Related: Why the Future of Retail Will Blow Your Mind

This weekend, an investigation by Buzzfeed revealed that Titan installed approximately 500 tracking beacons in old-fashioned payphone booths around Manhattan last fall, without the public's knowledge.

While the city had initially OK-d the project (it just didn't make its approval public) City Hall abruptly reversed course in light of the Buzzfeed report, ordering Titan to remove the beacons immediately.

Beacons run over Bluetooth and emit signals that your smartphone (unless you disable the device's Bluetooth) responds to, in part by relaying its location. The technology -- which allows local stores to send consumers push notifications based on their exact coordinates -- is understandably enticing for advertisers. Say you are approaching an American Eagle Outfitters: Beacons could allow the company to send you a push notification through its app, alerting you to a sale going on in the store right in front of you.

Related: The Rise of 'Nudge' Advertising

This isn't just a theoretical -- back in December, Apple activated iBeacon, allowing it to track shoppers who opted in to receive notifications about upcoming deals and events in all 254 of its retail locations in the U.S. And this summer, American Eagle Outfitters used the technology in 100 of its locations to send shoppers push notifications when they entered the store.

It's easy to see why New Yorkers weren't too pleased about the whole beacons-in-phone-booths things. While Titan said that it the devices were installed solely for maintenance purposes, they did tell New York Daily News that "there are potential advertising-use cases, for sure." And this possibility is what got privacy advocates (and the public) all fired up.

A spokesperson for Mayor Bill de Blasio told the outlet that "the beacons will be removed over the coming days."

Related: Grow Your Business by Using Push Notifications Effectively

Laura Entis is a reporter for Fortune.com's Venture section.

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