Wednesday, November 13, 2013

FirstNet and Public Safety Broadband: The threat of Connect America taking Public Safety Broadband customers... case discussion LA-RICS.

In this corner we have Connect America with “some” Federal support. In the other corner we have Public Safety Broadband with “some” Federal support. And the fight begins!

Both fighters have been circling each other for some months now, Connect America has some experience behind him and knowledge of what works and what doesn’t work. PSBN is the young and up-and-coming new guy, with very little experience, but has a goal of becoming the best. Which one wins? As with any large-scale telecom deployment, it always comes down to whoever has the better business model and can sustain operations over the long run. Just ask the carriers!

Using LA-RICS as a case analysis (lessons learned or learning): for LA-RICS it will be a hard sell, in that management is only focused on the technicality of the Public Safety element within the arrangement, and, has been heavily reliant upon the Feds to help fund them. The primary issue here is the lack of long-term support, plus the shortage of cash up front.  The authority relies upon the bonds to be sold, out of the taxpayers pockets, and propped up with some promised funds of BTOP grants (and other smaller grants), but how do you sustain the model long-term? Well, that means you have to garner more public support in hopes of taxing them some more, plus hope the Feds will continue to support you through grants and subsistence -- essentially LA-RICS is on food stamps.

Just my opinion, but the State is already deep in debt as it is, and is overly reliant upon the Federal Government already, so what’s different? The big difference will be if the State faults on it’s own debt then the Public Safety and First Responders will be left to their own means with no financial support. Or, worse yet, a huge natural disaster occurs and you are already stretched thin as it is, what good is the network if you can’t keep it upgraded, or maintained to a sufficient standard? Of all the places in the United States, we pick LA, which has the highest possibility of a large-scale disaster!

It is always easy to tell ourselves, “We are building this for the safety of the public.  Being that LA is most prone to disaster, makes it a perfect candidate to build it first!” Is it true though? If you don’t build the solution on a stable financial footing, you will only face hardship and detrimental progress towards achieving your goal, especially when no one wants to play in the mess you’ve created, after all, there are, or will be, plenty of other opportunities to go after instead.  

Now comes “Connect America” it has the same goals as the Public Safety Broadband, minus the “First Responder” piece. Every citizen everyday relies upon their cell phones to keep on top of emergencies -- their landlines are going the way of DVDs. Connect America plans to build out broadband to every American in the United States, what they are searching for now is a business model that will make the goal achievable. The LA-City Council is going to build out its own broadband solution to all the citizens of LA with fiber and wireless access. The fiber is a given, but will be really expensive due to the impact on breaking ground and cutting up pavement throughout the city…. traffic is already bad enough. Wireless is the way to go.

For any telecommunications consultant, or city manager, they already know that LTE broadband is what should be installed; after all, how many people with WiMax phones do you see walking around today? Plus, a lot of business, social and tourist come to LA, how else would you accommodate their devices brought in from another network? The going statistic now days is that LTE covers 99% of all commercial carriers, and that 1% of holdouts, they have already committed to LTE as well. You’re not going to force your customers to go buy WiMax handsets are you? The importance of the network is to grant access, not limit it. .

So, if LTE is the technology, then all you need is spectrum to operate on. For PSBN they have the D-Block. For Connect America they have bands already running broadband services, which means Managed Virtual Networks through carrier partnerships makes sense, all they need to do from there is get a model that builds out the rural areas.

Out of the gate Connect America is already all-inclusive of users, there is no limit on who can be a part of the network, which means, they can generate a lot more revenue than PSBN. As you see in the LA City Councils move they are enveloping Water and Utilities as long-term clients. If the Utilities are already getting broadband service through a deal with aspirations of broadband to everyone, what main clients are available for PSBN? None, actually! This is where connecting America gets interesting.

Without those stalwart clients on the PSBN architecture the State will lose it’s ability for long-term operations and maintenance, because they will have no long-term recurring revenue coming in to pay for it. That means the dependence on the taxpayers will continue. If you think a Board running a commercial enterprise is tough, try running it through a Legislature. 

What about the business strategy for Connect America? The important thing to note is that Connect America is no different than a commercial carrier, except a commercial carrier has already decided it is too costly to build out to the rural areas. This is where Connect America starts to become weak. You really need to think about your user model and how revenue will be generated, after all, if the carriers found it cost prohibitive to build out to the rural areas, why would it be any different for yourself? By tying in the large players, like Utilities, you stand a very good chance of success, but you need to keep an eye on the commercial subscriber, and its frenzy, you don’t want it to take over your plans and wreck your overall strategy. That doesn’t mean you don’t use the subscriber model, it just means stay on point with your larger customers. Also, you need to watch out for the hardening standards of your big clients, who will pay for those requriements?

The architecture, and the P3 model for PSBN, is best suited to be all-inclusive with all state “Public Safety Service Organizations” (mandated in the Jobs Creation Act), which includes all the Utilities. For LA-RICS, technically they are pursuing such clients, but its’ not on the front burner. Or, it may be just a case of being over committed to a goal that has been in place far to long that has pushed them beyond a point of no return. If they are concerned with the financial aspects of funding their solution, which has been evident, then you would think they would be very interested in who could help pay for the network and its long-term goals.

My professional opinion is that the management of LA-RICS, which you have to say is doing their very best, has been leading with technology since the beginning and have neglected a revenue scenario to help pay for it, after all, why contemplate revenue when the taxpayers and the Federal government keep giving you money to build it? Essentially they took their eye off the ball of creating a business case for a “private broadband company” that is in the business of providing broadband to Public Safety, yet controlled through majority ownership of the board, of which the State holds the majority share. I’m afraid they are on their way to not fulfilling their “self-sustainment” requirements laid out in the law. The only way to do that will be to gather as many customers as you can.

As my Grandmother used to tell me while I was searching for her freshly baked chocolate chip cookies, “you snooze you lose, buddy.”  

I don’t think that the entire State of California is thinking in this manner, which leads to even more confusion. When it comes to their statewide Public Safety Broadband Network, who is really in charge in California anyway? For a State the size that it is, you would think that it is quite important for such a network to be built and controlled, then again it’s always an experiment on the first, only in this case you risk losing a lot more. My suggestion would be to follow the direction of FirstNet and implement the Statewide Interoperability Executive Committee to run the show, led by a Statewide Interoperability Coordinator; else LA-RICS may become the thorn in the State’s middle toe.

My two cents; all States need to understand that the PSBN architecture is in fact a network that can generate a lot of cash; provide public safety; integrate all its public safety organizations; and eventually help monetize the structure of broadband service statewide so that it does not take more from the taxpayers, but instead adds to the revenue pool of the state. The only way to do that is by balancing the needs of all the potential users of the network through the Public Private Partnership model. If you don’t, you will lose your long-term support, ultimately leading to a few people getting some black eyes, and you will lose all your potential clients to help make your business case. I can help you get there, after all, if there is anyone else out there, that has dedicated themselves more to such endeavors; then we need to join forces.

Just some guy and a blog….

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