pdvWireless Announces Submission of FirstNet Bid

June 13, 2006–pdvWireless, Inc., announced today that it submitted a proposal to the First Responder Network Authority (FirstNet) on behalf of a consortium to build and operate a nationwide public safety broadband network. However, pdvWireless declined to release the names of any of its partners. pdvWireless became the second entity to publicly confirm the submission of a bid. Rivada Networks LLC also submitted a proposal (TRDaily, May 31), and last week it announced a number of its major partners (TRDaily, June 7).

There is speculation that other entities may have also submitted bids, including AT&T, Inc., and possibly Verizon Communications, Inc. Those carriers have declined to comment. FirstNet has confirmed that it received multiple proposals by a May 31 deadline, but it won’t discuss the identity of bidders. FirstNet plans to award a contract by Nov. 1.

Woodland Park, N.J.-based pdvWireless, a private wireless communications carrier, and the Enterprise Wireless Alliance have petitioned the FCC to realign the 900 megahertz band to allow pdvWireless, which acquired Sprint Corp.’s 900 MHz band licenses, to deploy a broadband network in a portion of that spectrum, giving priority access to utilities and other critical infrastructure industry entities (TRDaily, Nov. 18, 2014). The company also is launching private push-to-talk networks in major U.S. markets.

Top pdvWireless executives Morgan O’Brien, who is vice chairman, and Brian McAuley, who is chairman, are among the co-founders of Nextel Communications, Inc., (now part of Sprint). Mr. O’Brien’s first attempt to deploy a nationwide public safety broadband network failed with Cyren Call Communications Corp.

During a conference call this afternoon to announce pdvWireless’s fourth quarter and fiscal year-end financial results, Mr. O’Brien refused to release the identities of any other partners in the FirstNet consortium, citing non-disclosure agreements and saying that keeping that information private at this stage provides a “competitive advantage.” The company called them “world-class companies with recognized expertise in the critical areas needed to build out and operate a public safety broadband network.”

Mr. O’Brien also declined to discuss other details of the bid. But Mr. O’Brien emphasized “synergies” between the 900 MHz network that pdvWireless wants to build and the planned 700 MHz band FirstNet system. The FirstNet network would provide priority access to public safety “of all types,” Mr. O’Brien noted, adding that pdvWireless would “have somewhat the same task” with its network, although its focus would be on the CII industry, “which is sort of the next rung down on the priority latter.”

If the two networks are aligned, money could be saved on both capital and operating expenses, he said, noting the “very complementary” customer bases and adding that customers of each could use excess capacity on the other.

pdvWireless also said that even if the consortium does not win the FirstNet contract, there could be synergies.

“Although we understand that a number of other bidders or bidder groups are competing for the FirstNet opportunity, we determined that continuing to explore this opportunity, via the RFP process, was in our stockholders’ best interests because of a number of benefits to the company,” pdvWireless said in an annual report released today. “Independent of the outcome of the RFP process, synergies between the NPSBN and our planned broadband facilities could include the coordination of communications between our respective customer targets, first responders for the NPSBN and critical infrastructure entities for our 900 MHz facilities, and the potential to share network deployment, capital and operating costs.

“In addition, we can directly utilize the business, technical and other information developed for the FirstNet proposal in planning and preparing for the broadband facilities we plan to deploy,” pdvWireless added. “Further, participating with a consortium of leading wireless and technology companies has enabled us to establish valuable relationships with these companies and helped to raise the Company’s profile within the wireless industry and the technology community, all of which can benefit our existing spectrum initiatives and lead to further opportunities.  We also believe that we have access to skilled and experienced personnel and other resources well suited to pursuing opportunities involving the NPSBN. 

“The FirstNet RFP process is expected to continue for many months, and now that we have submitted our response to the RFP, our activities will be primarily driven by questions or requests issued to us by FirstNet.  Given that this is a competitive government RFP process that is governed by confidentiality restrictions, we do not intend to provide interim updates except to the extent required under applicable securities laws,” pdvWireless added.  

Regarding pdvWireless’s bid to build a 900 MHz band broadband network for use by utilities and others, the company provided an update on the regulatory and business issues today in a news release on its financial results, during the conference call, and in the annual report. The petition filed by pdvWireless and EWA has drawn complaints from many incumbent utility interests.

 pdvWireless said in the annual report that the company believes “that the most likely outcome is that the FCC will adopt a Notice of Inquiry as the next step in the process.  However, at this time we do not know the content or scope of any potential Notice of Inquiry.”

 In March, stakeholders in the proceeding said that staffers in the FCC’s Wireless Telecommunications Bureau had prepared a draft notice of proposed rulemaking concerning use of the 900 MHz band (TRDaily, March 24).

“We continue to believe this proposed realignment is consistent with the FCC’s past policies and practices, including its mandate to promote more efficient use of limited spectrum resources, and we will continue to work with all interested parties to achieve our objective,” John Pescatore, pdvWireless’s president and chief executive officer, said in the news release.

During today’s call, Mr. O’Brien said the company believed the FCC was leaning toward an NPRM rather than an NOI until the last few weeks. He said the company is “disappointed and frustrated” in the development, and he cautioned analysts on the call that an NOI “would not mean either that the FCC has denied our joint petition or that our joint petition will not ultimately result in an NPRM” and subsequent rules.

He also said that pdvWireless remains committed to working with incumbents on concerns they have, but he said, “This is a question of incumbents not being inclined to see significant change.” He said some smaller companies that want large utilities as customers are hesitant to speak out publicly in support of the proposed 900 MHz band network.

Mr. O’Brien and other company officials said pdvWireless has used the time waiting for FCC action to continue to study the band, work with vendors to test infrastructure, and show that filtering technologies can enable deployment of the proposed network while protecting narrowband operators from interference. Out of about 400 total licensees in the spectrum, only about 60 are large licensees, Mr. O’Brien said.

Mr. Pescatore said that pdvWireless has “options to deploy current solutions in either narrowband or wideband and then broadband” if given authorization. Among the applications that its spectrum can be used for are machine-to-machine uses for utilities, he said. He said the company has reached out to utilities to understand their communications needs. – Paul Kirby, paul.kirby@wolterskluwer.com

Courtesy TRDaily