Friday, February 19, 2016

FirstNet won't get the players it needs! They still don't understand the issue

There’s been a lot of activity recently pertaining to the Public Safety Broadband Network. I still can’t get over how na├»ve some can be in believing that the carriers are the answer to FirstNet. The carriers have a viable solution – for a commercial revenue driven business model – not FirstNet. Have you ever had a crush on a person only to be drastically disappointed after the first date?

With the recent RFP from Mexico, requesting a Public Private Partnership to build its own Public Safety Broadband Network, is a perfect opportunity for FirstNet to see what a real solution may be for its own bid. The size and complexity of the FirstNet solution is way too big for just one little partnership. The FirstNet solution will require a large consortium of private investment to drive the ownership model of FirstNet; the same context to which Mexico is asking for. The fact is the solution for FirstNet does not lay at the feet of the carriers, they are too small, and it clearly does not lay at the feet of just a contractor, the solution will be an ownership structure manifested with a consortium of private investors. It’s not about the technology, or the rollout, its all about the money and the ability to make money – pure and simple.

FirstNet won’t find what its looking for in their RFP. A State can act more expeditiously than a large contracting element run by the Federal Government. If FirstNet finally gets on the bandwagon, and starts to focus on a private equity or concessionaire model, then they will understand that they need to align themselves based on ownership, private funding, and return on investment – not the physical build. The State will have to build its own network anyway even if FirstNet were to be deployed on its own model. The State has all the local resources to construct. By FirstNet refocusing itself on the P3 (Public Private Partnership) ownership the funding and revenue will be come front and center. By making the ownership model front and center then we can augment any FirstNet effort with a financial connection to the State and meet the “self sustaining” mandate in the law. There is no other model that will enable the FirstNet solution to be “self funded” and “self sustaining”.

Focusing on a P3 is not enough, you have to really understand where you stand, where your partners stand, who is delivering what, and what the return will be. A good example would be the Kentucky Broadband project. Here we had the State, under Governor Beshear, solicit a P3 to build its core fiber optic network throughout the State. Unfortunately, the State did not adhere to models correct framework and solicited taxpayer bonds to fund a portion of the P3. In my model the State wouldn’t pay anything. This fiber optic network is in fact the underlining architecture for the Public Safety wireless program. Without the fiber solution the PSBN won’t work. Unfortunately, Macquarie did not fully understand the P3 model that they stole acquired for its deployment. In a State P3 model, specifically for the PSBN solution (which includes the fiber portion), the model I put forth does not require any taxpayer money. In fact, by introducing bonds to help pay for a solution within a State only injects the political process into the deal, something you would think Macquarie would have learned from the State of Utah -- another failed model. As you can read for yourself the Kentucky led P3 with Macquarie is now faltering under its own greed. Thank goodness that Kentucky has a new Governor, Governor Bevin, who understands what is happening and is trying to repair the damage already done. The fact is, the P3 for Kentucky was awarded and led under nefarious reasons, thus the reason the solution is failing, much like I warned about sometime ago.

In the end you have to construct the model and balance the needs of the entire partnership; and you must avoid taxpayer funding when it presents itself. Anything the Federal or State Government touches comes with the political engine, so be warned. FirstNet, and the State of Kentucky, can both learn from the RFP in Mexico. It is this lack of understanding, and the political tie-in, as the reason FirstNet will get less than what they were expecting in response to their RFP as written. We can’t sit back anymore and just convince ourselves that the current RFP is just a fact finding mission... again, we need to adopt the same model Mexico is pursuing and stop playing around with all the meetings and data collection.

Just some guy and a blog…..

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