Friday, October 25, 2013

FirstNet -- Are they making a decision on moving forward?

Picture yourself in the middle of a room, there are no windows and there is only one other man in the room who is holding a gun. You notice that he is very nervous and twitching as he walks around, then the lights go out. That’s what it feels like right now with FirstNet.

As with any new market, in the beginning we see a huge upturn in the amount of activity, then we see a drastic down turn, then we start to see a gradual upturn that is sustainable. For the time being we are at the bottom of the drastic downturn. I envision that we will start see that gradual upturn now. The only thing that is holding us back is FirstNet, which is odd given the fact that they want to build this network so badly. Well, sometimes you are your worst enemy.

My suggestion to FirstNet, come to realize that you need to pick your model and move forward. Things change all the time, so expect that the change will impact you in the future, that’s business.  The carrier model is going to be fraught with problems. The only viable solution, for such a large build out, is through the Public Private Partnership at the State level. Nothing is perfect, but it is your best chance at success. Even if you do the carrier model, joined at the hip with the carriers to deploy the network, you still come to realize that you aren’t meeting a few of your prime directives – funding, self-sustainment, hardening and coverage. Actually I think those are the only real directives.

Carriers won’t give you any funding and the taxpaying base will be a huge issue for the foreseeable future. The only way to truly get the money you need to build the network will be with Private Equity.

Self-sustainment will be an issue with the carriers as well. If you think the carriers are going to convince their shareholders that they should just maintain the network without any real return, think again. The carriers work on a subscriber base, which is not even close to being achievable with Public Safety. You need the support of all the Public Safety Service organizations to make this work, and think again if you think these players really want to do business with just the carriers. If we stick to the rules of hardening, that alone will sink that ship.

Hardening will be an issue with the carriers because they limit themselves to just enough back up generation to accommodate their ROIs, that would mean someone has to pay for all of the carriers and tower company upgrades. Sounds like a sweet deal…. if you are a carrier or tower company. Plus, who will maintain it? Better yet, who will pay to maintain it?  Well with the carrier model it will be the taxpayers. With the Public Private Partnership you base your design off the needs of its users, not what asset the carrier or tower company has, and, you can generate enough usage and revenue from the users to attract private equity, thus avoiding the State, or the Feds, having to pay for the build and its long-term management. To add to that, the carriers can actually become a client themselves of the PSBN by focusing on the transport of rural commercial traffic to their network – another source of revenue for the P3 model, which in the end solves another problem – broadband access to rural Americans.  Imagine that. The carrier model won’t do that. In fact you even solve the carriers problem of trying to break into the rural markets without overspending on assets to areas that generate very little revenue in return -- in the P3 model they actually go straight to revenue. 

And finally, coverage, we need to stick to our guns and target 100% of geographic landmass. By partnering with the carriers you will only cover 40% of the geography, and, it will only be targeted on the metro environments. The metro environments will not really be an issue. All we will do with the carrier model is add capacity to their business, yet Public Safety will still face the same issues we face today – hardening, self-sustainment and funding. With the P3 model it is to the benefit of Private Equity to build 100% coverage, more users, and we are not just talking about any users. These users are fixed and stalwart and have no issues with payments. These clients also have a direct need for broadband-access – LTE access – to maintain their own business models, in fact, for some of these clients it is mandated (reference ARRA funding per DOE for SMART GRID for example). Plus, some of these clients have more telecom infrastructure than the carriers themselves. To add to all this, we can even sell the under-utilized bandwidth, or usage, to the carriers to help them in the metro environments as well -- all be it on a Priority 3 basis -- just like we would in the rural markets.  

All we need is for FirstNet to grab hold of the Public Private Partnership model, and its execution at the State level, by doing so, FirstNet can implement best lessons learned from each of the statewide build-outs as they progress and administer any changes to the follow-on State installations. Plus, this model uses the spectrum to its maximum benefit of creating revenue, revenue that can be shared between the State and FirstNet if they want.

In the end, if FirstNet does not accept the model, then they risk missing out on such plans and certain States will commence on their own, netting all the benefits.  Then again why would you listen to me?

I’m just some guy and a blog….

Anybody need a good consultant on FirstNet or deploying large telecom programs? I'm available.

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