May 16, 2017–First Responder Network Authority (FirstNet) and AT&T, Inc., officials today touted their 25-year partnership and the benefits to public safety of the planned nationwide public safety broadband network. But the chairman and co-chief executive officer of Rivada Networks LLC, which led a consortium that lost a bid for the FirstNet contract, suggested today that states would get short-changed if they allowed AT&T to build their radio access networks (RANs).
In remarks this morning at the Association of Public-Safety Communications Officials-International’s Public Safety Broadband Summit & Expo, FirstNet CEO Mike Poth and Jim Bugel, AT&T’s vice president-FirstNet state plans and acquisitions, said that states that agree to allow AT&T to build their RANs will get immediate priority access on all of AT&T’s LTE spectrum and preemption in the fourth quarter of this year and benefit from the economies of scale, pricing, and coverage that come from a national carrier.
Mr. Bugel did not discuss pricing or coverage details, but he said that they would be in draft state plans that are due to be released in mid-June, following a national state plan kickoff meeting with state single points of contact (SPOCs) June 7–8 in Dallas.
States will then have 45 days to review the draft plans and make any comments. After that, FirstNet plans to finish reviewing any comments by no later than August or September. Final state plans will be delivered to governors no later than late September. Governors will then have 90 days to decide whether to seek to opt out of having AT&T build their RANs, meaning state decisions should be made by the end of this year.
However, Mr. Poth told TR Daily that FirstNet officials hope that some states will quickly decide to go with AT&T. In his remarks to the summit, Mr. Poth said that FirstNet held “a very rigorous, competitive process” to look for a network partner. “We didn’t go out looking for AT&T.”
He also touted AT&T’s team and its network build-out experience, saying that “time to market is going to be a lot quicker” for states that choose the carrier.
In his remarks, Mr. Bugel said that in addition to priority and preemption capabilities, which will be included in user fees, AT&T, which has agreed to invest $40 billion in the network in addition to the $6.5 billion it gets from FirstNet, has extensive expertise at building networks and will ensure the system is secure. He also stressed the importance of rural coverage and said that 72 Band 14 deployables will be dedicated to the network, and that users will have access to hundreds more in AT&T’s inventory. He also said that users will have access to more than 40,000 AT&T hot spots and 6,000 distributed antenna system (DAS) sites.
Mr. Bugel’s presentation said that “[m]ore than 99%” of Americans will be covered by the network. As for priority access and preemption, Mr. Bugel’s presentation said that priority access will be available on all of AT&T’s LTE bands in the third quarter, with “[r]uthless [p]reemption” being added in the fourth quarter. Additional priority levels and the “[a]bility to elevate priority for situational response” will be added in the first quarter of 2018, according to the presentation.
Mr. Bugel also said that pricing will be “more than competitive,” and he asked for input from states after the draft state plans are released. “We have to go out and win you over,” Mr. Bugel said. “If we’ve done something wrong — it’s a marketplace — we’ll fix it.”
He also said that he is “very optimistic and very … encouraged from what I’m hearing from the states and what they’re looking for.” Mr. Bugel answered a number of questions from state, public safety, and industry representatives. For example, he said it makes sense for states to explore alternatives to signing with AT&T, although he said requests for information (RFI) may make more sense than requests for proposals (RFP), which several states have issued, saying they are “a very expensive thing to do.”
“The states have to do due diligence,” he said. “I believe that the states learning as much about their options is just … the responsible thing to do.”
“Compared to some of the alternatives that we’ve looked at out there, this is the right thing to do. It delivers instant benefit, we don’t have to wait for it,” Mr. Bugel said of AT&T’s deployment. “These people have the money, the balance sheet, to back this up.”
“This is the best economical, technological … [and] future-proof decision that a governor can make for their first responders,” Mr. Bugel argued.
In rejecting a bid for the FirstNet contract by Rivada Mercury LLC, the consortium led by Rivada Networks, FirstNet questioned Rivada’s wholesale business plan and financial viability.
Kelly Gottsponer, Arkansas’ public safety broadband network outreach coordinator, said “there are a lot of holes and gaps” in AT&T’s network in rural areas of her state. She asked if stakeholders can seek improved coverage.
Mr. Bugel said AT&T wants that type of input during the consultation process. He also said it is working with roaming partners to improve rural coverage and that coverage in rural areas may get better through the use of Band 14, which is in the 700 megahertz band, rather than spectrum that AT&T has in the 1.9 gigahertz band.
Ms. Gottsponer also asked how deployable equipment can be brought in quickly for emergencies. “We’re going to have rapid deployment,” Mr. Bugel replied, citing “a one-step process.”
Another audience member, Red Grasso, deputy director of FirstNetNC for the North Carolina Department of Information Technology, said the priority and preemption capabilities would be a “tremendous benefit.”
In response to another question, Mr. Bugel noted that AT&T’s contract with FirstNet requires coverage commitments for each state that are included in state plans and “enforced by fines and forfeitures.”
But in an interview with TR Daily this afternoon, Declan Ganley, co-CEO and executive chairman of Rivada Networks, said public safety and states are going to get short-changed with the FirstNet-AT&T contract. He also blasted an APCO blog posting yesterday that criticized Rivada (TR Daily, May 15).
“Handing that capacity over to just one competitor in a highly and increasingly competitive market for bandwidth makes no commercial sense whatsoever, and because it makes no commercial sense, it’s not going to make sense for public safety because they ultimately will be the ones who end up paying for it,” Mr. Ganley suggested.
“I have never, ever signed up for a deal where I didn’t know what the price was,” he added. “Nobody knows what AT&T’s price is going to be aside from the vaguest of vague promises, and for anybody to be able to say, or claim to say on behalf of public safety, that this is a great deal when you don’t even know what the deal is … needs to do a little bit more verifying and a little bit less trusting.”
Rivada, which is hoping to convince states to allow it to build their RANs, has a business model that it says would allow the company to not charge public safety users and instead get revenues from monetizing excess capacity through a dynamic spectrum exchange.
Mr. Ganley complained that FirstNet’s RFP penalized bidders if they said they wouldn’t charge a user fee by judging them riskier and not allowing them to count those subscribers toward required adoption benchmarks. When Rivada Mercury submitted its bid, it said it would charge users one cent each “because we had to put in a charge,” he said. Mr. Ganley also criticized FirstNet for its interpretation that the Middle Class Tax Relief and Job Creation Act of 2012, which established FirstNet, requires any excess revenues from network deployment at the state level to be reinvested into the nationwide system.
Asked whether AT&T’s offer of priority and preemption would make it difficult for Rivada to compete with the carrier, Mr. Ganley asked, “What technically does that mean? How are they technically going to execute on ruthless preemption? They’ve never done it before.”
“The states that have so far done RFPs are going to have something to compare side by side when the AT&T plan comes in,” Mr. Ganley also said. “They know what their alternative is.” He said that additional states are expected to issue such RFPs, adding that “we will be there responding to every single one.” As for AT&T’s financial ability to fulfill on the 25-year contract, Mr. Ganley said, “AT&T as we know — it is highly unlikely to exist in 25 years. The whole wireless industry is going through a massive change. … The carriers are struggling. Their models are broken. And it’s not just in the U.S., it’s around the world.
AT&T is “trying to become a media company” with its planned acquisition of Time Warner, Inc., he added, which “is going to significantly change the financial status of AT&T.” —Paul Kirby, email@example.com