Wednesday, July 2, 2014

Is FirstNet a big waste of time? Does Public Safety need FirstNet?

I wanted to highlight some of the difficulties in the below strategy of FirstNet's RFP and what it will face if they pursue a one network build for the entire Nation, most specifically the lack of consideration of the States, the monetization of the spectrum and commercialization of the Public Safety’s spectrum. I can only raise the bigger concerns I have, in that there are too many issues to highlight in one blog entry. 

Taken from FirstNet's procurement page:

Comprehensive Network Solution Draft RFP:

The Comprehensive Network Solution Draft RFP may solicit offers to develop a comprehensive network solution that possibly includes the core and all RAN components, backhaul, devices, network infrastructure, deployable capabilities and maintenance to fully function as an operational wireless public safety LTE network. This solution would potentially include "in kind" or monetary value provided by the offeror in consideration for secondary use of FirstNet's excess network capacity. The value provided for excess network capacity, time to market, first responder performance objectives, and rural coverage, among many other factors, will be considerations in this potential approach. (FirstNet Website)

In the context of FirstNet deploying a one network programmatic approach, which this will only benefit the largest contractor, a contractor who may not be the best suited, but this isn't the worst of it; why we over complicate these things is beyond me. The bigger issue with this strategy still does not address how Rural America will be covered. Partnering with the commercial carriers, to build the entire network, still, will not meet the needs of funding the build out to the rural areas. This strategy screams taxpayer funding all the way, and I can almost guarantee that it will be heavily subsidized by the State, not the Feds. This strategy also risks total defunding if we have a change in administration.

The framework of this strategy illustrates their intention to bring in a commercial carrier to build the network, where as they anticipate that the commercial carriers will pay for the build – “in kind” – which means something for nothing without any real justification or incentive for it’s future outcome. If I were a carrier today, and I am avoiding the build to the rural areas of the Nation because the ROI isn’t justified, why would I think that partnering with the Federal Government would accomplish the need, a need that isn’t essential to the success or future of my existing business model?

The solution is broken up into two parts: Capital Expenditures (capex) and Operational Expenditures (opex).  The capex spend will be a tight thing to concur in that no amount of investment in the capital construction of assets will justify a market turn for the carrier to refocus resources away from their long-term plans of content services. There is a reason the carriers are moving away from owning the assets. One of the reasons is because their existing market is much larger than FirstNet and is shrinking everyday which also happens to be core to their current revenue generation. Another reason is because the market dynamics have changed, where as, the carriers need to re-home their products to the data generation else they will not survive in the future, that means the current carrier market needs to go up against new players like Google, Netflix, Apple and the likes. The battle the carriers are facing today is a much more important topic than answering the heroic call of building out FirstNet without any assurances of its success in revenue generation – seems pretty flimsy to me.

Another topic of concern is the opex portion. If the network will cost $60 Billion to build, who will pay for the $6 Billion annually to operate it? The carriers have enough on their plate to run their own operations let alone FirstNet’s needs. Why would I divert my energy and resources to try and concur a FirstNet business model that is built within a House of Cards? It just doesn’t make sense. If I were a carrier my first thoughts are to grab the spectrum, if I can just tie this whole solution up in the process and the legal system long enough, then the spectrum will come back up when FirstNet fails to meet its objectives, then the context of the conversation will change to “I told you so”, or, "give it to those that are in the business of selling broadband today”. Why invest my Billion’s into a FirstNet plan that will fail in its current approach? All I have to do is wait-it-out and get the valuable spectrum for next to nothing, or free? My execution plan would be to stonewall this program and tie it up to the point it fails on its own merits.

It has been more than 2 years since FirstNet has been created, their current course, and mindset, needs to be changed or this will be a big waste of time. I’m confident in Sue Swenson, but I also fear that the penetration of the carriers has convoluted the thought process with fear and intimidation to the point that the existing FirstNet members don’t know what is real and what isn’t. The fact is this is only a broadband network, nothing else. Yes, it’s a big new market, but all you have to do is plant the first seed. Just plant the seed and fixate the growth on a sound business model of your own private network. FirstNet really needs to relinquish itself from the mindset that the only resources they have to tap into are those that created the current carrier business model; a business model that will not work for FirstNet; a business model that is on the downturn itself; a business model that is converging into a content delivery model, not an access solution. 

The big elephant in the room on this one is the fact that the current FirstNet mindset is a one holistic network approach that has to be governed by a new Federal Organization. Of course the Federal Government will still be needed to insure everyone is playing fair, but that role is an oversight role, not an execution role. Stop looking at his from the top down and start looking at it from the bottom up. This network is too big to think holistically, you need to start in a microcosm of it's eventually landscape. The bottom up approach means that you need to start in one State (the seed) and then build-out from there. I have studied this long enough to know this is the best course forward. If I were a State Governor I would just listen in my consultation meeting with FirstNet and then commit to the "Opt out" scenario, because the current FirstNet strategy will not succeed. 

If the Governor doesn't choose to "Opt out" soon then they will risk the spectrum falling into the commercial broadband space...when that happens you can forget about having your own Public Safety Broadband Network.

But then again I’m….

Just some guy and a blog….

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