Thursday, September 5, 2013

FirstNet and the importance of LA-RICS

A lot is happening in regards to LA-RICS that FirstNet should take notice. In my last blog entry I talked about the shortage of Tower Crews in the market. There is another key topic that needs to be addressed....civil construction.

More than 70% of the LA-RICS proposal relates to civil construction. Mainly this is due to the need for less complexity in the first phase of its rollout, which essentially puts the focus on the build and the first stage of implementing the technology (that being LTE and microwave). Why is this a problem?

In the telecommunications industry, mainly with the commercial carriers, the construction contractors, primarily the big engineering companies, are not competitive with the carreirs and the OEMs in that the services rendered by the carriers don't require any complex hardening scenarios, like FirstNet does, ultimately means the carriers can go on the cheap by focusing on local turf players. Plus, by the carriers making their OEMs the responsible parties for building their networks, the carriers can simplify their contracts through lump sum services contracts tied to the sale of equipment. This means the carrier can call on the OEM anytime they want, for what ever reason, using that fixed sum. Kind of a all-you-can-eat model or what others might term as their ^$#^^%. Being that the OEMs are more concerned with profit through the sale of their gear, they tend to go cheap with their services portion (what they term delivery) by, confusingly, trying to apply paid services under the overheads of product development. When that happens they are forced to bring in cheap, low-cost, contractors to fulfill roles they simply can't afford. Unfortunately, the first to be scrutinized are their construction contractors. This is why we don't see the major engineering firms, i.e. Bechtel, Fluor, CH2MHill, etc.., building the carrier networks. They can't compete in the EFI (engineer, furnish and install) market place. There overheads are too high to compete with the "mom-and-pops". But now comes FirstNet!

FirstNet is a whole new beast. FirstNet needs the complex hardening characteristics that put it above the standard carrier design, plus, FirstNet is not really concerned with profit so much as to enable its self-fulfillment responsibilities within the legislation, that was passed to create the PSBN, as well as to attract private equity to pay for the deployments. This means the small players will not be the primary source of leading the construction effort -- better known as TURF players. When you have 20 construction crews delivering concrete; digging 30' holes for 70' towers; pouring concrete pads; delivering steel towers through town; and installing vendor gear on top of those 70' poles; all while controlling an army of contractors, leasing, zoning and environmental crews, it takes a big engineering firm to insure it gets done correctly.

Just some guy and a blog.....

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