Thursday, July 19, 2012

What will the Public Safety Broadband LTE Network cost the States?

The thought that comes to mind when talking about the State right to “Opt Out” leads me to the misunderstanding of the size and scope of what the NTIA and the State will undertake.

“If a state decides to opt out, the governor must notify FirstNet, NTIA, and the FCC. The state then has 180 days to develop and complete RFPs for the construction, maintenance, and operations of the RAN within the state.  The state must submit an alternate plan for the construction, maintenance, and operations of the RAN within the state to the FCC and the plan must demonstrate that the state will be in compliance with the minimum technical interoperability requirements, and interoperability with the NPSBN.  The FCC will review and either approve or disapprove the plan. If the FCC approves the plan, the state can apply to NTIA for a grant to construct (not operate and maintain) the RAN within the state. The state will need to apply to NTIA to lease spectrum capacity from FirstNet.”

I will give you one example, but this example was witnessed on four other occasions, its important to illustrate a good example so that we can put things into context. Just in the last year I did a 201-site build for a very rural client (as opposed to a denser footprint of the city), which included the “core”. That cost came to roughly $70 Million (we had a very low overhead compared to the big contractors) and only covered 3 counties (it was thin…it was a pilot). Of that $70 Million roughly 85% ($60 Million) was for design, analysis, testing, shipment, storage, PMO and construction. The material and equipment came to roughly 10-12% ($8-$10 Million). Of that 12% of material only 60% dealt with backhaul microwave, LTE base stations and the core. In the end we averaged $348 K per site. Remember that only covered 3 counties -- and was a pilot. Now I’m no rocket scientist, but if you target 98% coverage (doesn’t matter if it is phased or not) and your State has on average 20-30 counties, then it may be just me, but that seems to illustrate a lot more money will be needed than what the NTIA has the authority to grant. You should note that the other four bids came to a per-site estimate of between $250-$500 K per site, depending on the design and the geographical requirements, which drove tower placement. And we didn't even cover the cost of centralization of the any State assets; nor the control center needed to run it; nor the datacenter to store all the information collected. 

“The act grants NTIA borrowing authority not to exceed $2 billion to implement Subtitle B-Governance of Public Safety Spectrum.  The act grants NTIA borrowing authority not to exceed $135 million to implement Section 6302, State and Local Implementation.”

If you are going to build your new Public Safety Broadband Network you are going to need cash and investment. There are multiple ways of getting cash, but the optimal way is through Public Private Partnerships. Thus the Presidents mandate in the February legislation he signed that requires the need to use Public Private Partnerships to help fund the entire program.

One thing to add; the money coming from the NTIA to help build the PSBN (the $135 Million) does not include long-term operations -- that the State has to cover on its own.

Just some guy and a blog….

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