Axon Hints It May Ruin A City's Credit Rating For Cancelling Its Contract For Body Cam Footage Storage

from the retention-specialists-are-the-worst dept

Axon -- formerly Taser -- is betting big on police body cameras. It doesn't care much about the hardware. That's the just the foot in the door. The real money is subscription and storage fees. These contracts are worth far more than the hardware, which Axon is willing to give away to secure a far more profitable revenue stream.

Axon not only charges for storage of recorded footage but also for access. It provides a front end for law enforcement agencies to search uploaded footage. It also makes defense lawyers do the same thing -- putting itself (and a lot of contractual language) between accused criminals and the evidence they're legally entitled to have.

Emails obtained via a public records request show Axon plays hardball with municipalities who decide they'd rather use a different vendor. When a California city decided to take its business elsewhere after four years with Axon, its representatives responded by threatening to trash the city's credit rating. Beryl Lipton has the details for public records request powerhouse MuckRock.

FPD [Fontana Police Department] discontinued its use of the Axon body cameras, and Evidence.com became increasingly irrelevant. Nonetheless, as part of the five-year agreement with Axon, the department continued to pay over $4,000 a year for the service.

“Our IT people came to me and said, ‘Hey, we have this contract with them that we’re continually paying on, but we’re not using them anymore. Is this something we can look at getting out of?’” said [Lieutenant Joseph] Binks, who handles departmental purchasing. “We did an audit and all the cases that we were working had all been [closed], so we really didn’t need a contract with them.”

The city informed Axon its cloud services were no longer needed and got this response from an Axon rep:

The only cancellation term is Termination for Non-Appropriations or lack of funding. There is a negative effect, however, as it can affect the credit rating of the City. Since we are looking at about nine months it would probably make more sense to ride out the rest of the contract…

It's at this point that Axon becomes indistinguishable from a cellphone provider or Dish Network or any other company that uses contractual language to discourage people from taking their business elsewhere. But the rep's statement wasn't actually true. The city had another option -- one it was unaware of until MuckRock reached out for comment on this article.

According to purchase orders, emails, and the terms and conditions of the agreement released by FPD, the order for the five body cameras included two other options for cancellation in addition the Termination for Lack of Appropriation clause: one for a Contractor’s failure to deliver as promised; the other, for a Termination for Convenience.

This option allows the PD to break its contract without Axon dinging its credit record for… well, deciding not to continue paying Axon for a service it wasn't using. Confronted with this, Axon refused to comment, citing the "confidentiality" of its agreement with the City of Fontana -- the terms of which the city had willfully turned over to the public in response to a records request.

Axon's cheap/free cameras are the hook. The real money is in subscription and storage fees. According to SEC filings, Axon is pulling in $160 million a year in storage and access fees for its body cam products. This number has tripled over the past three years and will likely surpass the amount it earns from device sales in the next couple of years.

It's unsurprising Axon is doing everything it can to squeeze every drop from this revenue stream. But that doesn't excuse threatening former customers' credit ratings to keep them on the hook for services they're not using. Government agencies also need to be aware of what they're getting into when a body cam vendor shows up with free cameras and several pages of dense legalese. It's not the sort of job that should be left to public records requesters to do the government's work for free.

Filed Under: body cameras, contracts, credit, evidence.com, fontana, fontana police department, police
Companies: axon, taser


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  • identicon
    Anonymous Coward, 15 May 2019 @ 4:59am

    If only we had a government with a backbone

    These kinds of contracts would never have been allowed in the first place. Once a company starts acting like it is the government, it is time to break it up and prevent it from ever becoming that powerful again. Ma Bell was the standard, now let us break up Axon the same way.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 May 2019 @ 5:07am

      Re: If only we had a government with a backbone

      Is there some monopoly over body cams I haven't heard about?
      Axon is only a $160MM/year biz.... hard to believe it comes close to being the hegemony that was AT&T back in the day.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 May 2019 @ 8:16am

      Re: If only we had a government with a backbone

      Oh, bullshit. A contract is a contract. That's the whole point of contracts. You typically sign on for more years in exchange for lower annual pricing. The city chose to sign a 5 year commitment and they should absolutely be held to that commitment.

      There is a negative effect, however, as it can affect the credit rating of the City.

      And this is hardly "trashing" the city's credit rating. An unpaid commitment is a black mark, yes, but it won't "trash" their credit rating. At only $4000 per year the city should just pay off the last 9 months and call it good. They did commit to that, after all.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 15 May 2019 @ 9:34am

        Re: Re: If only we had a government with a backbone

        ...except at the time, some bright star thought to write in a clause essentially stating "if we're no longer using the service, we can end the contract early." Unfortunately, it seems like nobody currently involved was aware of this.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2019 @ 5:59am

    Some in the business community have become lazy and complacent when it comes to covering up their misdeeds. Apparently they now think they are allowed these transgressions and there is little that can be done about it so why not.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 May 2019 @ 8:17am

      Re:

      How is expecting someone who signed a contract to fulfill that contract a "transgression" or "misdeed"? When you buy a car on payments and sign a contract with the bank do you think it's ok to just stop paying for the car 80% of the way through the contract term?

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 15 May 2019 @ 9:20am

        Re: Re:

        Another car analogy, does this ever get old?

        A government and business enter into an illegal deal and you want it to be viewed as a simple above board vehicle purchase.

        What if the government said your car dealership is not allowed to exist ... oh wait, that happens.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 15 May 2019 @ 9:38am

          Re: Re: Re:

          How is the deal illegal? Be specific.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 15 May 2019 @ 10:27am

            Re: Re: Re: Re:

            Corruption, extortion, kickbacks, anti-trust ... these are all illegal and yet they continually happen. And yes, it happens in your own back yard.

            Just because some DA somewhere refuses to do their job does not mean that everything those people were allowed to get away with is not illegal. Nor does it mean that others will not be persecuted for same.

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 15 May 2019 @ 1:53pm

              Re: Re: Re: Re: Re:

              So the contract contained clauses for corruption, extortion, kickbacks and antitrust? That's an unusual contract indeed.

              reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2019 @ 6:01am

    i can see exactly what the FPD said.

    'what's the problem? it's government money, not ours, so we'll spend it how we like, regardless of the consequences!!'

    reply to this | link to this | view in chronology ]

    • identicon
      xfontana, 15 May 2019 @ 6:20am

      Re: stupid careless cops

      yup, government malfeasance is the big problem here, as usual

      Axon is sleazy and plays hardball in its contracts -- but it has done nothing illegal at all.

      Guilty party here is obviously the dopes at the Fontana city Police Department who signed that one-sided contract.
      Why give those government clowns a pass?

      Also, regarding public access to public government records -- government itself is absolutely the biggest (and usually the only) roadblock to legitimate public access.
      Detailed court records and transcripts are notoriously difficult/expensive for average citizens to obtain.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 15 May 2019 @ 7:30am

        Re: Re: stupid careless cops

        Yeah, business does nothing wrong ... it's the governments fault for not regulating me.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 15 May 2019 @ 7:43am

        Re: Re: stupid careless cops

        Yes, AXON is sleezy, and maybe their bad reputation will start to cause problems for them in the future. But where are the Lawyers going over things like this before anyone is this dumb to sign such a contract?

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 15 May 2019 @ 8:22am

          Re: Re: Re: stupid careless cops

          Why is it dumb to sign a 5 year contract to get cheaper pricing than they would have gotten with a 3 or 4 year contract? If they really thought they'd use the service for at least 5 years there is no problem. If they thought they'd snag the lower pricing and then bail after 4 years, well, that's a problem. If they thought they'd just spend some public money on something they knew they wouldn't need for 5 years that's also a problem.

          But nothing in this article makes Axon out the bad guy here. The police department signed a 5 year contract. That's a commitment to use and pay for the service for 5 years. Now they want to bail on the contract. That's known as "breach of contract" and they could be sued for the remaining unpaid part of that 5 years. Instead it sounds like Axon would just report it to the credit reporting agencies, just as any other creditor would.

          Axon may be sleazy but this whole thing is overblown and everyone is super quick to jump in the wrong direction.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 15 May 2019 @ 9:22am

            Re: Re: Re: Re: stupid careless cops

            Do we really need the government making decisions for us wrt our personal finances? Is that the ever dreaded socialism? Why do you like it when it is socialism?

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 15 May 2019 @ 9:39am

              Re: Re: Re: Re: Re: stupid careless cops

              Are you joking? Because what you said makes no sense. Government expenditure has nothing to do with your personal expenses. It has everything to do with spending collected taxes, funds gathered from the public in order to support the government.

              Are you an anarchist? Or an uber-right libertarian?

              reply to this | link to this | view in chronology ]

              • identicon
                Anonymous Coward, 15 May 2019 @ 10:30am

                Re: Re: Re: Re: Re: Re: stupid careless cops

                "Government expenditure has nothing to do with your personal expenses."

                "Why is it dumb to sign a 5 year contract to get cheaper pricing than they would have gotten with a 3 or 4 year contract?"

                Are these public figures negotiating a lower price for you? If not, what are they doing?

                reply to this | link to this | view in chronology ]

                • identicon
                  Anonymous Coward, 15 May 2019 @ 1:54pm

                  Re: Re: Re: Re: Re: Re: Re: stupid careless cops

                  Excellent straw man. Now back to my post to which you replied by veering off the tracks.

                  reply to this | link to this | view in chronology ]

                • identicon
                  Anonymous Coward, 15 May 2019 @ 1:56pm

                  Re: Re: Re: Re: Re: Re: Re: stupid careless cops

                  I assume so, else there is no reason to sign any contract longer than a year.

                  So again I ask:

                  Why is it dumb to sign a 5 year contract to get cheaper pricing than they would have gotten with a 3 or 4 year contract?

                  Can you respond to a post directly without veering off into the non sequitur weeds?

                  reply to this | link to this | view in chronology ]

              • identicon
                Sharur, 15 May 2019 @ 10:59am

                Re: Re: Re: Re: Re: Re: stupid careless cops

                It has no direct, short term effect on personal expenses, but it does have a large effect in aggregate on personal budgets. Higher government expendures correlate to higher taxes, either at the present through collection rates or in the future to service accrued debts.

                I don't know about you, but between various taxes, I am giving the government roughly about a third of my income every year to various government bodies, which has a significant effect on my personal budget. In aggregate, I spend more on taxes than I do on housing, for example.

                reply to this | link to this | view in chronology ]

                • icon
                  Bamboo Harvester (profile), 15 May 2019 @ 11:26am

                  Re: Re: Re: Re: Re: Re: Re: stupid careless cops

                  Welcome to the 0.001% that actually pays attention to their finances.

                  Amazing, isn't it? Not just what's pulled from paychecks, but every utility, service, and purchase is taxed.

                  When you add them up for the year and divide by the number of paychecks you get in a year, it's staggering.

                  reply to this | link to this | view in chronology ]

                • identicon
                  Anonymous Coward, 15 May 2019 @ 11:35am

                  Re: Re: Re: Re: Re: Re: Re: stupid careless cops

                  It's actually closer to 50%

                  reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 15 May 2019 @ 9:33am

            Re: Re: Re: Re: stupid careless cops

            The sleazy part on Axon's part was the CSR misrepresenting the contract...

            reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 15 May 2019 @ 4:52pm

            Re: Re: Re: Re: stupid careless cops

            Axon is totally the sleazy one here, they misrepresented what was in the contract, stating there was only one reason the city could terminate the contract, when in FACT there were three options, one being the service was no longer being used.

            You are really claiming that this corporation is a shining bastion of righteousness in their communications and dealings?

            Have I got some ocean front property in Oklahoma that I would like to sell you there goober...

            reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2019 @ 6:34am

    All the other shady stuff aside, charging for both storage and access to data is the standard business model for cloud storage services. If they're really greedy then they'll also be charging ingress fees.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 May 2019 @ 7:30am

      Re:

      Which makes them less viable

      reply to this | link to this | view in chronology ]

    • icon
      Bamboo Harvester (profile), 15 May 2019 @ 7:54am

      Re:

      More troublesome is Chain of Custody. What they're storing is EVIDENCE.

      You can't contract that away.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 15 May 2019 @ 7:22pm

        Re: Re:

        Evidence is routinely transferred between many different contracted organizations for storage and analysis. The police routinely contract analytical chemists, biologists, computer scientists, medical doctors, ballistics and explosives experts, toxicologists, psychologists, people who own tow trucks, shipping companies, and many other groups to collect, handle, analyze, store and transport evidence. The vast majority of "chain of custody" rules exist precisely because evidence is so often handled and stored by entities that are not the police.

        reply to this | link to this | view in chronology ]

        • icon
          Bamboo Harvester (profile), 16 May 2019 @ 5:15am

          Re: Re: Re:

          This is a bit different than a blood sample.

          The bodycam sends directly to the third party cloud, and retrieval has to be paid for.

          In your scenario, they'd be pulling the memory chip from the cams at the end of each shift, sealing them in evidence bags, and couriering them to the "storage facility".

          I've got 32TB of storage on the system I'm using to type this. At 480p, that's hundreds of thousands of hours of video.

          And it cost me about half of the yearly fee the SFPD is paying.

          On a home system. There's absolutely no reason for the police to be using a third party "storage" company for bodycam footage.

          reply to this | link to this | view in chronology ]

  • identicon
    Bobvious, 15 May 2019 @ 7:02am

    Now we know why body cams aren't turned on or left on.

    It turns out it's not Police malfeasance in the form of avoiding scrutiny. It's the unbelievable costs associated with curating that data.

    reply to this | link to this | view in chronology ]

    • identicon
      Bobvious, 15 May 2019 @ 7:20am

      Re: Now we know why body cams aren't turned on or left on.

      And here's a report that is a sort of win for the public in the "feared for my life" schtick, https://www.abc.net.au/news/2019-05-15/officer-tasered-driver-in-fremantle-random-breath-test/111147 08

      So, not just "Only In America!"

      Union stands by officer

      The WA Police Union will "stand by Senior Constable Keenan", according to union president Harry Arnott.

      "We are obviously disappointed with this decision and we feel for our member and his family," Mr Arnott said.

      "The ramifications of this decision will be felt across every police jurisdiction in Australia, and we will vigorously pursue all avenues of appeal to ensure that justice is served."

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 May 2019 @ 8:23am

      Re: Now we know why body cams aren't turned on or left on.

      How is $4000/year an "unbelievable cost" for a government-level service?

      reply to this | link to this | view in chronology ]

      • icon
        Bamboo Harvester (profile), 16 May 2019 @ 5:17am

        Re: Re: Now we know why body cams aren't turned on or left on.

        It's worse. There's 9 months left on the contract.

        If they're paying quarterly, that's only $3,000 to run it out.

        They spend more than that yearly on floor wax.

        reply to this | link to this | view in chronology ]

  • identicon
    Pixelation, 15 May 2019 @ 7:50am

    This is what happens when the person signing the contract has no accountability.

    reply to this | link to this | view in chronology ]

  • icon
    afn29129 David (profile), 15 May 2019 @ 8:18am

    You have just been clouded.

    You have just been clouded. I see as the most significant problem here is the video is being stored on a Axion owned/controlled cloud when the videos should be ONLY in physical custody of the local police agency.

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Rog S., 15 May 2019 @ 10:12am

    Cock blockin bastards.

    Let me guess: a nebulous, amorphic, Jewish billionaire affiliated Israeli entity owns it, right?

    Israelification 101

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2019 @ 6:09pm

    It doesn't care much about the hardware.

    Why would Axon need to? If anything, hardware that curiously manages to fail every time a suspect kicks the bucket while surrounded by cops, or when a fleeing naked unarmed man gets gunned by a trigger-happy policeman, is often vastly preferred.

    It's not a bug, it's a feature!

    reply to this | link to this | view in chronology ]


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