Tuesday, July 24, 2012

The Telecommunications Carrier Model and the Public Safety Broadband Public Private Partnerships

“To the optimist, the glass is half full. To the pessimist, the 
glass is half empty. To the engineer, the glass is twice as big 
as it needs to be.” (Unknown)

Its been my observation recently that the technical and tactical drive of the initial Public Safety Broadband Network plans are clouding the efforts for a State to understand the impacts of not pursuing a foundation for its needed Public Private Partnership.

There is plenty of deployment, interoperability and integration issues being addressed by the vendors and the engineers -- but it may be an observation worth bringing-up – that is the lack of development around a sound business model to build and sustain that technical platform. After all, it’s easy to just pass over the topic of paying for the network when the entire basis of perception is on a non-revenue and private platform. Plus, it doesn’t help to propose grants and tax dollars without any real consensus on how the money should be spent – case in point would be the DOE stimulus money for SMART Grid; money put into the market too quickly without administering a real business model beforehand. Nor does it help that the market conditions kill our entrepreneurial spirit of creativity by forcing us into the “reliance” on the government to come up with the plans and funding to get things started. In reality without that foundation of a solid Public Private Partnership (P3) business case; some States may find themselves way out in front of the pack only to have to turn-around and come back because the industry made a turn. What is the solution?

A solution for this situation is to simultaneously start to pursue a solid foundation of a business model that works for your State in coordination with the Federal Board, or FirstNet. If it will cost you roughly $750 Million to build 3000 towers within your State ($250k X 3000); then you should script a business model that secures the benefits of the LTE platform, much the same as a carrier does. But you must design the solution that expands upon the notion of building a private network of networks. This developed business model needs to incorporate all aspects of revenue generation; revenue from handsets, revenue from leasing options, revenue from investors, and funds from the State and Federal budgets. All of these elements are tied to together so it is essential that equal participation be the norm. When you force the hand of one element over the means of the others, all you are doing is imposing the weaker link methodology – that is the network, and the business case, will only be as good as its weakest link. In this case it may be over-engineered to a point that it hides the benefits of a “self funding” platform.

So how do you get started? You need to start having knowledgeable discussion around the P3 concept and how all the players (State and Federal entities) will take part; how the technology can be exploited; what investment scenarios can be made; and what are the long-term objectives. It will be crucial to bridge the technical adaptation of the LTE platform with a solid business case objective wrapped within a P3 vehicle. My suggestion; there are only a few of us that have the technical background and the P3 expertise, I would start employing those resources now that will help mold your plans for the future. Once the market turns around, it will be too late, you will be forced to play with the rest of the herd or forced to follow behind.

Just some guy and a blog….

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