New York City's public transit provider, the Metropolitan Transportation Authority, is set to pour millions of dollars into a high-tech project that will give New Yorkers a real-time view into the exact location of every bus in the city.

Last year, the transit authority announced BusTime, a pilot project on the B63 bus route running through Brooklyn. With a GPS tracking device on each bus, software and firmware developed by the open-source civic hacking shop OpenPlans, and a little marketing, the MTA's New York City Transit division had created a way for riders to send a text message to a specific shortcode — using a code unique to the bus stop where they were standing — and get an automated response telling them exactly how far away the next bus was. At a cost of $265,000, the transit provider hadn't found a way to fix the tendency for buses to get stacked one immediately behind the other or to get caught in traffic — but it was a start.

Today, the MTA announced that this project will immediately go live in the borough of Staten Island — which has buses and a light rail line but no subway — and will be in all five boroughs by 2013. BusTime data will be available through an API, a web dashboard, via SMS and by using QR codes.

"Real-time changes everything in the best way for a consumer," said Dylan Goelz, who heads up marketing at Roadify, a company and app building a sort of crowdsourced, API-backed guide to transit and trip planning. "The main reason people don't ride the bus is either because they don't know where it goes or more often than not they don't know when it comes. And the MTA isn't necessarily at fault all the time ... but as a bus rider it's pretty incredible to know exactly when and where the bus is."

Not everyone agrees that recent civic innovations have been useful. Writing for Fast Company, user experience designer Hana Schank recently pilloried Roadify for claiming to track available parking spaces, but hardly ever showing an available spot. Schank also went after the MTA for, among other things, directing subway riders — underground and away from cellphone services — to check out a long URL for information about service changes. The city was also a target, for lining up prize money through its annual NYC BigApps competitions — Roadify is a past winner — to award contestants for using city data, rather than taking an approach more narrowly focused on rewarding apps that solve problems for New Yorkers. (Roadify, Goelz tells me, has a Version 2.0 coming out this month that includes a number of improvements.)

But this project's expansion into all five boroughs signals new ground for public transit — bus tracking done in part through open-source software, with location information available through an API, competing early with existing proprietary solutions such as one already in place or being tested Chicago, Boston, and San Francisco, among other places — but also for open-source and open data as part of a business model in government IT. The open-source bit is interesting, in theory, because of how much it enables people like Goelz's team at Roadify to take what's been done and repurpose it. It also means that software improvements made in New York at the MTA's expense could be used by Portland, Ore.'s TriMet public transit authority, were it to adopt real-time planning — and the work that TriMet is paying OpenPlans to do on open-source trip-planning software could find itself being useful to MTA riders. If they are able to overcome the kind of usability hurdles Schank pointed out, that is; BusTime's Brooklyn pilot also took some of her ire for telling riders how far away the bus was in terms of miles rather than blocks.

The BusTime expansion project will cost $7,200 per bus to install hardware and firmware, MTA spokesman Aaron Donovan told me today, with $1,200 of that coming from this project's budget and the remaining $6,000 coming from a budget for the MTA's upcoming transition to a near-field-communication powered payment card from the credit-card-swiping-esque MetroCard system now in place. Donovan says there are over 6,000 buses in the city's fleet at present.

In addition to that, the MTA expects to pay out about $7 million in software maintenance and development costs over six years. The main lead on software will be OpenPlans, where the transportation group now has another sizeable contract that will reduce the extent to which the non-profit must lean on founder Mark Gorton's largesse to keep operations afloat.

After losing a costly legal battle, Gorton's file-sharing enterprise LimeWire closed up shop in 2010. OpenPlans seeks to incubate projects that make cities friendlier to pedestrians, bicyclists and users of public transit, as well as projects that fuse urban planning with open-source software. This is all fairly uncharted territory, and places where what OpenPlans does will break ground for others trying to figure out what does (or doesn't) work as part of a business model for open-source development. The nonprofit already had plans to become more financially independent from Gorton — having spun its OpenGeo open-source GIS unit into a largely self-contained business — but his legal battles accelerated the move.

OpenPlans is working on this project alongside Cambridge, Mass.-based Cambridge Systematics.