Should Congress Hit the Reboot Button on FirstNet?
By Joe Hanna
Tuesday, September 01, 2015 | Comments

On Feb. 22, 2012, President Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012. Prior to the passage of this legislation, the public-safety community fought a lengthy battle to secure 10 megahertz of spectrum known as the D block. In an intense campaign to secure the D block, the public-safety community waged a win-at-all-costs strategy. Unfortunately, the past 3.5 years have proven those costs to be high.

I advocated for and supported the implementation of a nationwide public-safety broadband network (NPSBN). I had the privilege of testifying on multiple occasions before both the House and Senate about the need for a robust, dedicated public-safety broadband network. While I did not support the reallocation of the D block, I continue to support the ultimate goal of completing the mission of providing public safety with the national broadband network that the public-safety community requires. I fully appreciate the leadership of the First Responder Network Authority (FirstNet) board led by Sue Swenson and the management team hired by FirstNet. The board and management team have time and again demonstrated the dedication to make the NPSBN a reality, not just a concept.

That said, the enabling legislation called for the implementation of an independent agency, but the resulting structure has been anything but that. The FirstNet leadership has frequently said the FirstNet structure is a startup company operating under federal requirements. I can think of no greater oxymoron than this definition.

Hiring Process
As an example, all hiring of FirstNet personnel is done through a federal job site, with most hires taking at least six months. The fact that FirstNet just took 16 months to hire a permanent CEO speaks volumes to this point. Adding insult to injury to this protracted process, TJ Kennedy, FirstNet’s acting executive director, who has fortunately remained with FirstNet is now “functioning in the role of president” and must await permanent assignment to that position through another lengthy process that includes having the position posted for other candidates and a final selection process by the FirstNet board.

Also, consider that all FirstNet salaries are based on federal pay scales. What other new entity would try to build a nationwide business comparable to Verizon or AT&T and pay a management team less than $200,000 per year? The pay scale for top executives in FirstNet is far below that of C-level executives in any other telecom enterprise, not to mention that there are no bonuses, stock options or payments if the corporation is successful or gets acquired by another entity.

The legislative mandate related to the composition of FirstNet’s board is contrary to the model that any new wireless startup company would put in place. While it is understandable that the enabling legislation sought to create a balance between public safety and wireless experts, this politically correct viewpoint does little to provide a board structure that has the underlying expertise to build a national network from scratch. Equally, in the vetting process for prospective board members, there is considerable concern regarding avoiding conflicts of interest. The bottom line is that anyone who is not conflicted through past affiliations is probably not competent to provide oversight for this endeavor.

Procurement
In terms of procurement structures mandated by the current federal regulations, FirstNet is equally challenged. For example, what other startup telecom would be prohibited from talking to potential partners, vendors and advisers without the oversight of a federal procurement officer who sets strict limits on what can and can’t be discussed? Federal procurement guidelines include a host of handcuffs that create unnecessary steps and risks to the FirstNet team. Federal mandates for inclusion of veteran, minority, women-owned, and other specific enterprises may be politically correct but not necessarily a value to this highly specialized endeavor. Through the extended procurement process mandated by federal acquisition rules, there is significant potential for the unintended consequence of forcing potential vendors and suppliers out of the marketplace. Many small or mid-size companies that have focused on the potential of FirstNet have limited funds that will be exhausted while waiting for a final award to be made.

Scope
FirstNet started with the principle of covering “every square meter” of the nation, recognizing that the needs of first responders in rural America are no different than those in urban America. A guiding argument by public safety when seeking the enabling legislation was for improved coverage over that provided by commercial carriers.

The latest round of discussions related to coverage in the current draft request for proposals (RFP) released by FirstNet and discussed at length during the initial Industry Day event and the Public Safety Communications Research (PSCR) Public Safety Stakeholder meeting in San Diego clearly shows coverage gaps equal to, if not greater than, coverage currently provided by commercial carriers. In almost every discussion regarding deployment of the NPSBN, the deployment will include a fraction of the number of sites deployed by the tier-one carriers.

While the enabling legislation requires equal coverage and implementation of rural coverage — a major element for Sen. John Rockefeller, who championed the enabling legislation — current discussions about initial network implementation clearly focus on population, service levels, number of first responders, and similar elements that zero in on urban markets. When seeking the enabling legislation, public safety demanded that the NPSBN offer better coverage, capacity and reliability than commercial services used by public safety. The early models clearly show that FirstNet cell sites will be far less dense than commercial carriers currently operate, thus providing considerably less capacity and cell edge coverage than existing commercial carriers.

The legislation doesn’t require a change in terms of coverage — it clearly calls for rural coverage — but FirstNet officials should remember the many questions they have received from lawmakers on this topic during congressional hearings. Coverage is one of the most important requirements for public safety.

Funding
The initial revenue equation cited by FirstNet included the initial $7 billion in federal funding, subscriber fees, spectrum leases for excess capacity and savings gained through existing tower and backhaul facilities donated by public safety. The public-safety contributions were originally proposed to offset costs to public-safety entities, which donated these in-kind facilities.

At the first of two FirstNet Industry Day meetings, however, the notion of offsetting access fees with in-kind services was dismissed. FirstNet has defined the potential for the number of users to be between 4 million and 14 million. The 4 million mark is already highly optimistic and will take many years to achieve because of delayed time to build out in all markets, getting subscribers to embrace FirstNet and transition away from commercial services, and the potential for commercial services to be priced more competitively than FirstNet. FirstNet fails to acknowledge the fundamental principle that the more users who migrate to the NPSBN, the less capacity that carriers will see for viable use through covered lease agreements (CLA). Quite simply, potential income from user fees and CLAs are mutually exclusive, not complementary.

It is one thing to syphon off 2 million customers from wireless providers; it’s another to syphon off 12 –14 million customers. Public-safety users who subscribe to major commercial carriers are a relatively stable customer base with minimal interaction, low turnover, low maintenance requirements and reliable bill paying. As FirstNet contemplates expanding the definition of public safety to meet the 14 million subscriber level, such a definition will dip into this commercial base at a significantly higher level. At some point commercial providers facing a major drain in high-value customers may well consider a more aggressive pricing structure, thus increasing competition with the FirstNet customer base. If commercial carriers elect to become more competitive, there will be less incentive for their public-safety customer base to migrate to the FirstNet network when it is built.

The sum of all fears is that failure to make substantial modifications in FirstNet’s underlying structure may well result in no “qualified bidder” responding to the final RFP scheduled for release at the end of this year. Prospects for a qualified bidder — whether a national carrier as a prime bidder or as a partner — are already questionable given the fact that the current FirstNet schedule will place the timeframe for the response to the RFP in a direct overlap with the FCC’s pending 600 MHz auction, scheduled for March 2016.

Most involved parties clearly understand the commitment of the significant resources that will be required to develop a response to the FirstNet RFP. Given similar resource commitments that will be put in play by the wireless carrier community responding to the 600 MHz auction, one can only ask what priorities will be established. Given the 3.5 years that have already transpired in FirstNet’s attempt to get up to speed, it is doubtful that there is any realistic option to postpone the release of its RFP until the close of the 600 MHz auction.

In considering these challenges, is it time for public safety (i.e. the Public Safety Alliance) to regroup and ask Congress to hit the reboot button to modify the current legislation and salvage a realistic and viable chance of realizing the goal of an NPSBN. Possible changes to the current legislation or to the manner in which the current statute is interpreted by the Department of Commerce and the National Telecommunications and Information Administration (NTIA) may include, but should not be limited to:

1. Making FirstNet truly independent as envisioned in the statute
2. Adjusting the composition of the board to ensure the same success as could be potentially realized in any new commercial venture
3. Allowing FirstNet the ability and resources (including pay structure) to recruit and hire staff with the experience and talent necessary to oversee the implementation process
4. Fundamentally modifying the procurement process to allow a competitive environment, including provisions that will allow potential vendors and partners to realistically interact with the board and staff to develop a path that someone is willing to walk.


After a 30-year career in public safety, Joe Hanna now serves as a consultant to the wireless industry in matters related to public policy and regulatory affairs. He is a fellow in the Radio Club of America (RCA), a senior fellow for the Center for Digital Government, and a life member and past president of the Association of Public-Safety Communications Officials (APCO) International. Hanna is a member of the editorial advisory board of MissionCritical Communications magazine.
 



 
 
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Comments
On 9/9/15, Provider said:
Joe, thank you for writing up your thoughts. The FirstNet statement of objectives (SOO) has been remarkably stable for months. Any prime contractor worth its salt should assemble a team with core network and radio access network (RAN) site providers now. If primes are coy or wishy washy on who their subs are Section M should whack them hard in the scoring. FirstNet needs to tell the primes to get it together and not wait for someone to give them the answer that already resides in the SOO.

On 9/3/15, afed firstnet said:
Your comments are completely correct but Congress is completely gridlocked and cannot pass even the simplest piece of legislation. It is impossible for them to revise the law that created Firstnet.

On 9/3/15, S.C. Marrow said:
Feds should take the whole thing over ... many, many competent managers in federal service manage much larger entities with similar complexities and are paid way less than $200K a year. High salaries don't guarantee success ... dedication and knowledge do. The whole concept is tied way too close to private enterprise profit making, and that's the problem.

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