FirstNet Spectrum Lease Agreements Draw Criticism from Vermont Advocate

Spectrum manager lease agreements (SMLAs) drafted by the First Responder Network Authority (FirstNet) for states that seek to opt out and build their own radio access networks (RANs) drew criticism today from a government accountability advocate who lives in Vermont. In a written commentary, Stephen Whitaker called a draft SMLA reported on in the trade press “a simply heavy-handed scare tactic.”

“There is absolutely no legal authority for the proposed grossly exaggerated Termination Fees, (up to $173M for Vermont) especially when it is documented that these were calculated to pay for an entire ‘Greenfield Network’ build, presumably built new, over top of existing LTE networks owned by Verizon, AT&T and VTel in Vermont for example,” Mr. Whitaker added. “A wasteful concept and a red herring.”

A summary of an SMLA prepared by FirstNet for Vermont said that if the SMLA were terminated “for cause” before the full term, the state would have “to pay to the Government the entire cost of reconstituting a Band 14 RAN in the State as determined by FirstNet ….”

The maximum termination payment would be $173 million if the agreement were terminated within 900 days of Vermont’s governor getting its state plan from FirstNet.

Vermont also would be obligated to pay $6.075 million in spectrum network capacity fees to FirstNet over the 25-year life of the SMLA.

The SMLA also includes public safety adoption milestones, which range from 157 primary connections and 73 “extended” primary connections, which include those by public safety entities other than law enforcement, fire, and emergency medical service users, in the first year to 2,511 primary connections and 1,328 extended primary connections in Year 25. The state would be responsible for “disincentive payments” for missing milestones. The maximum payments range from nearly $1.2 million in the sixth year to nearly $1.8 million in the 25th year.

AT&T, Inc., FirstNet’s network partner also must pay FirstNet spectrum capacity fees and faces disincentive payments if it falls short of adoption milestones.

The SMLA summary also says that the state must integrate its RAN with the FirstNet core and must pay all costs to do so. The SMLA summary also says that once FirstNet provides written notification, the state must transition operation of the state RAN to FirstNet or a third party selected by FirstNet. The summary was marked as a “Confidential Draft.” It is dated Oct. 3.

In response to questions about the SMLAs, a FirstNet spokesman said, “Building and operating a RAN within a state or territory is major undertaking with significant responsibilities. The SMLA is required by FirstNet’s enabling statute to ensure that an opt-out state’s RAN is sustainable and supports the Nationwide Public Safety Broadband Network.  The SMLA terms and conditions are fair and balanced to ensure the state’s network is self-sustaining for 25 years and are in parity with the terms and conditions that FirstNet’s nationwide contractor is expected to meet in opt-in states.”

The terms that FirstNet would impose on opt-out states drew criticism earlier this week from New Hampshire Gov. Chris Sununu (R.), who signed an executive order establishing a committee to review the “regulatory and financial risks” to the state if it seeks to opt out of having AT&T, Inc., FirstNet’s network partner, build its RAN (TR Daily, Oct. 16).

“New Hampshire’s Statewide Interoperability Executive Committee (SIEC) has determined from a technical standpoint that an opt-out of FirstNet is far and away our best option, as evidenced by their unanimous 15-0 vote. The State must nevertheless conduct a thorough review of the financial and regulatory viability of Rivada’s opt-out plan,” the governor said in a statement. “As part of this review, we will seek clarification of certain proposed fees, as well as clarification of penalties that may be imposed by FirstNet if an opt-out were to fail. These fees and penalties appear to be arbitrary and primarily designed to deter states from opting out of FirstNet plans. That is why I am calling on key officials at the federal level to assist us as we examine the numbers released by FirstNet and to ensure that states are being afforded their right to make their decisions with correct information.”

In other FirstNet-related news, the states of Oregon and Washington have issued a joint request for proposals (RFPs) “to establish a Northwest Public Safety Broadband Network (NWPSBN). The States are seeking responses from Proposers who can offer a no cost solution to the States while providing the professional services, products, equipment and warranties required to design, build, deploy, finance, operate, maintain and continually improve and update a statewide wireless broadband system to serve Oregon and Washington Public Safety Entities that is fully interoperable with the First Responder Network Authority (FirstNet) National Public Safety Broadband Network (NPSBN).” Bids are due Nov. 13.- Paul Kirby,

Courtesy TRDaily