Kennedy: FirstNet Pleased with FCC Auction Anti-Collusion Guidance

First Responder Network Authority (FirstNet) President TJ Kennedy said on October 19 that the authority is pleased with guidance that FCC staff released earlier this month concerning whether parties would violate the agency’s anti-collusion rules surrounding the incentive auction if they also had discussions regarding FirstNet’s request for proposals (RFP) (TRDaily, Oct. 6).

Industry representatives have said the guidance is crucial as discussions over the RFP will occur during the FCC’s “quiet period” for the incentive auction. FirstNet plans to release its RFP by the end of this year, while the quiet period for forward auction participants kicks in Jan. 28, 2016.

The guidance clarified that “discussions in connection with the First Responder Network Authority (‘FirstNet’) draft request for proposals for construction of the Nationwide Public Safety Broadband Network that may involve discussions of post-auction market structure will not violate the rule so long as they do not relate to the licenses being auctioned in the incentive auction.”

“We feel we have exclusion now” to allow parties to discuss the RFP without violating the FCC’s anti-collusion rules, Mr. Kennedy said during a webinar today for Wall Street investment analysts.

During the webinar, Mr. Kennedy and other FirstNet officials stressed the benefits to the private sector of partnering with the authority to deploy a nationwide public safety broadband network. For example, Mr. Kennedy said the financial model envisioned by FirstNet would allow partners to reach positive cash flow and see a return on investment sooner than would normally be the case if a company acquired spectrum at an auction and then proceeded to deploy it.

Those partnering with FirstNet would not be responsible for the same huge upfront capital outlay, he said, making it “a unique opportunity for both existing and new entrants.” He also noted that FirstNet has proposed that any winning partner provide fixed payments to FirstNet for the leasing of excess capacity. Those payments would increase over time.

Mr. Kennedy also said that he is confident that over a five-year period, “most of the country [can be] covered” by the network. He said responses to the RFP would likely be submitted in May 2016 and that it would probably take three to six months to review. An award would then come at the end of 2016 with deployment beginning in mid-2017. FirstNet envisions a five-year deployment plan with construction in some states being completed much more quickly, such as in one or two years, Mr. Kennedy said.

Mr. Kennedy stressed that the objectives-based approach means that entities can propose a variety of frameworks for building the network through the national acquisition approach selected by FirstNet, including a national carrier and rural providers, a national carrier and a regional player, or a new entrant with partners. He estimated that 30,000 to 40,000 macro cell sites would be needed as “a good starting point” plus additional small cell sites.

Mr. Kennedy also said the proposed 25-year contract term, which would consist of five five-year terms, would provide “long-term certainty to the operation.” He also said it was unlikely that public safety preemption would be needed on a large scale, except possibly for “the big national event.” More likely, any preemption would be necessary in small areas for emergencies. Mr. Kennedy also estimated that on an everyday basis, public safety entities might only use 5% or less of the network’s capacity.

Mr. Kennedy answered a myriad of questions from the analysts, many of whom did not seem very familiar with FirstNet, including the process for states to opt-out of having FirstNet build radio access networks (RANs) in their states. Getting opt-out approval would face “a pretty high bar,” Mr. Kennedy said. – Paul Kirby, paul.kirby@wolterskluwer.com

Courtesy TRDaily