New Hampshire Committee Recommends No Separate Core for LTE Network
Monday, December 11, 2017 | Comments

New Hampshire’s FirstNet Opt-Out Review Committee recommended that Rivada Networks’ plan for the state not be conditioned on having a separate core network for first and secondary responders.

“Rivada should acknowledge that state actions related to state-built RAN (radio access network) deployment are limited to the construction, maintenance, operation and improvement of the state-built RAN within the state, and the RAN does not include the core network,” the committee’s report to Gov. Chris Sununu said.

The committee also recommended that Rivada provide a separate third-party commercial core for any commercial service that it plans to provide.

“Rivada should be prohibited from paying for the commercial core using funds received by the state from the federal government or from band 14 spectrum revenues received by the state,” the committee’s report said.

Whether or not an opt-out state should be allowed to deploy a separate state network core has been a much-discussed topic. In July, Verizon asked the FCC to clarify whether or not an opt-out state could deploy a separate core from the FirstNet core. In responses to an FCC request for comments, several entities said that separate cores should be allowed. The topic also routinely came up during FirstNet-focused sessions at the Association of Public-Safety Communications (APCO) International Conference in August.

The FCC has released an interoperability compliance matrix for states that opt out to ensure compliance but said the issue of separate cores was outside the scope of its interoperability order.

Rivada believes that states would be better off owning their own core because of redundancy, autonomous operation and local control purposes, said Brian Carney, senior vice president, Rivada. He also noted that legislation does not forbid a state from owning or operating a Long Term Evolution (LTE) core.

“A state core is fully consistent with nationwide interoperability and with the recommendations of the technical advisory board for interoperability that was created by the [Middle Class Tax Relief and Job Creation Act of 2012],” Carney said. “That said, we understand that the state does not want to pick a fight over the core, and we are prepared to work within the constraints imposed by FirstNet in the event that they remain in place.”

Sununu announced New Hampshire’s opt out of the First Responder Network Authority (FirstNet) Dec. 7. Sununu created the committee to review the risks and challenges associated with opting out.

With the opt-out decision made, the state and Rivada are now negotiating the contract but there is no timetable for completion yet, Carney said.

Rivada delivered the plan it developed under a no-cost agreement with New Hampshire earlier this year. That plan will need to be reorganized for the FCC and National Telecommunications and Information Administration (NTIA) reviews that opt-out states must undergo, but is otherwise done, said Carney.

The plan is not publicly available yet but will be released following a review to redact proprietary information, said John Stevens, New Hampshire’s FirstNet single point of contact (SPOC).

Other recommendations in the report include:
• The final contract should not be conditioned on Rivada’s ability to monetize any excess spectrum, and the company should be contractually obligated to the state whether or not it can monetize the excess spectrum.
• Any contract with Rivada should include the same access to the FirstNet device and equipment ecosystem as though the state were part of FirstNet.
• The contract should require Rivada to continue with the buildout regardless of whether the state receives any grant funding from NTIA.
• The buildout plan approved by the state should be detailed enough so that the state can review, audit and direct material compliance with the plans. There should also be a process for the state to review any proposed changes to the original plan.
In addition to the contract recommendations, the committee explored risks and challenges that the state faces in opting out. The two major risks that the committee identified were the regulatory approvals required and the related financial risks, and the financial risks to the state if Rivada is unable to implement the alternative plan.

For the regulatory reviews, the committee said that the NTIA portion of the process appears to be riskier than the FCC component.

“Given that the FCC has adopted standards to be applied in its review, and despite the fact that some of the adopted standards are technically ambiguous, the FCC review does not pose a high risk for rejection on interoperability grounds,” the report said.

If a state fails the interoperability review with the FCC, the Middle Class Tax Relief and Job Creation Act of 2012, which created FirstNet, says that construction of the network in the state will follow the state plan provided by FirstNet. Therefore, the committee said, there is no financial risk if the state should fail that part of the process.

“The standard for review at the NTIA level, and the timing of the process, is less clear than at the FCC,” said the report. “Moreover, unlike at the FCC level, there is no language in the act providing for FirstNet to build out the network if the state’s alternative plan fails to pass the NTIA review for funding and achieving a spectrum lease. Accordingly, the risk to the state increases once it reaches the NTIA review.”

However, the committee added that two recent events may have reduced that risk: FirstNet CEO Mike Poth’s recent testimony at a congressional hearing and David Redl’s appointment as NTIA administrator.

“First, during his appearance before the Committee, FirstNet CEO Mike Poth indicated that FirstNet has the contractual right to require its vendor, AT&T, to build out in a state for 900 days, following delivery of the FirstNet plan,” the report said. “While FirstNet has not committed to exercising this contractual option, it appears that FirstNet will consider doing so as long as a state has pursued the opt-out in good effort.”

For Redl, the committee noted that he served as chief counsel at the House Committee on Energy and Commerce when the opt-out language was drafted.

“For that reason, we believe he is likely committed to preserving the opt-out option for states,” the report said.

The committee’s second identified risk concerns conditions contained in a draft spectrum manager lease agreement (SMLA) provided to the state by FirstNet. As part of the SMLA, the state would be required to pay spectrum capacity payments over the term of the lease.

“Rivada has represented that it will be responsible for these payments as part of its alternative plan, and that these payments to FirstNet will be covered as part of the bonds and other insurance they have agreed to provide,” the report said. “However, if for any reason, either of those options fail, the state could be liable for these payments pursuant to the SMLA.”

The draft SMLA also includes disincentive payments that the state will owe to FirstNet if its partner fails to meet adoption and participation goals by certain deadlines. The committee again noted that Rivada has said it will be responsible for those fees if they become due and will provide a bond to minimize the risk to the state.

The final risk contained in the SMLA is the requirement that if the state fails to finish its buildout, it would be obligated to pay to reconstitute the band 14 RAN in the state in accordance with the FirstNet state plan or another plan specified by FirstNet. This amount could range from $20 million to $600 million, the report said.

The committee again went back to Poth’s testimony where he said the figures represented “an estimate of the worst-case scenario,” assuming a “greenfield” build of the network and operation of the remainder of the 25-year term.

“In other words, the estimated termination payments contained in the draft SMLA represent a situation in which FirstNet has to come in and build a new network from scratch, with no revenue to offset the buildout and operating costs,” the report said. “Assuming Rivada makes progress in the construction of an adequately interoperable network, the risk of that situation occurring may be mitigated. Moreover, FirstNet has made clear the state would only be liable for the actual cost of reconstituting the network in the state.”

The committee also noted that Rivada said it would provide a bond or other kind of insurance to mitigate the risk of the state becoming liable for the payments.

The committee’s report was based on eight meetings, which included presentations from FirstNet, New Hampshire, Rivada, and AT&T officials. The committee also reviewed materials including the state plan provided by FirstNet and AT&T, a draft SMLA provided by FirstNet and AT&T, applicable federal and state laws, and Rivada’s alternative plan.

The committee had reviews of the financial viability and the feasibility of Rivada’s alternative plan performed. The financial viability review is confidential under state law, while the feasibility review is subject to attorney-client privilege, the report said.

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