Friday, November 22, 2013

FirstNet Funding Issues? Who would have thought? New Mexico and Ohio are not apples-to-apples!

Now all of a sudden who is going to pay for FirstNet starts to be discussed…. about time. As I stated in my first blog entries, as well as my RFI responses to FirstNet, now I can actually say, “I told you so”. 

Listening to the House Energy and Commerce Hearing Senate yesterday (I said Senate but meant House Energy and Commerce hearing) the main consensus of the panel was about who is going to fund it: both the capital for deployment as well as its long-term operations and maintenance. As I said in the beginning, there is only one way to fund this big build-out --- through Private Equity investment and the monetization of the spectrum under a Public Private Partnership that is controlled at the State level. Essentially, allowing the State to create its own broadband company to run its portion of FirstNet.

It was getting lonely on this bandwagon, but now it seems we have people jumping aboard, so it won’t be so lonely after all.

In listening to the statements in yesterdays hearing it is necessary to point out that New Mexico and Ohio are not apples-to-apples. New Mexico is using its portion of the BTOP funding, which has nothing to do with the $7 Billion, and is only deploying LTE of 6-10 towers along the border, essentially a pilot. Their initial program doesn’t even come close to addressing the $200 Million required to build just the estimated 639 towers, for just the RAN portion of the deployment, of which will be required to cover the State, let alone the long-term operations and maintenance. New Mexico still has to ask itself, "Where it will get that money when it wants to deploy statewide?" This will put New Mexico into the same conundrum as the rest of the States – like Ohio. When all said-and-done, New Mexico will be looking at a 500-700 Million dollar, all-inclusive, network.... mark my words. Just to compare, for Ohio's RAN alone we are looking at $550 Million and 1600 towers, doesn't include Data Center, NOC Operations, Billing Platforms, or maintenance and upgrades..

Ohio is already rationalizing its statewide deployment, which has nothing to do with BTOP, and it is the right course they need to take. Stu Davis is asking the right questions, and soon New Mexico will have to start asking the same questions. In short, New Mexico seems to be hoping for the federal agencies to come in and build their statewide solution, which may happen for the border area, but will they want to pay for the mountains of northern New Mexico as well? Unless altered agendas are at play, which usually means politics, and which I tend to stay away from -- I just say it like I see it.

It’s nice to hear Bill Schrier, up in Washington State, starting to evangelize that utilization of all the states entities and agencies need to be considered as users to make the revenue happen. As I stated from the beginning, it is essential that all the State’s entities and agencies within the State be allowed to access the network under a paid plan. But, it needs to go a step further.

Being that everyone is starting to see that the revenue will drive the implementation of the entire network, but most importantly, the State’s network, the next step will be the realization of alternative revenue sources. We can make the case for Private Equity to invest in a statewide capital program, and the long-term O&M of the network solution, just by looking at the initial users, but there is more revenue to be had. If I told you what they were then I wouldn’t be able to feed my family. Let’s just say there is a lot of revenue in that spectrum…. the carriers know it as well. But, why would a 25-year veteran of the telecom industry know anything about that.

Just some guy and a blog….

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