Wednesday, July 27, 2016

FirstNet -- NTIA starts to have a combined approach to Opt-Out and Opt-in? First stop revenue!

If you can’t beat them join them.

Maybe, just maybe, I’m starting to see tones of a combined Opt-Out and Opt-In solution being considered by the NTIA. This is excellent news! By incorporating the Opt-Out and Opt-In solution into a combined approach is a very smart thing to do. Now States that decide to build out their own radio access network can obtain a template of a design consideration when implementing minimum standards for hardened sites, transport IP solutions, virtual network connections and cyber security related solutions. Most importantly, the State gets the opportunity to create its own solution of interoperability between adjoining States.

One important topic that needs to be considered – one that few people seem to understand – is the use of the revenue. If you read the NTIA, or FirstNet’s, interpretation of the law you will notice that they don’t go very deep into the topic of the revenue, other than “a State can’t use the revenue” and “all revenue the State makes has to be reinvested back into the network”.

First off, this would be an asinine effort to block the State from using the revenue; after all the network and the spectrum belongs to Public Safety, so why can’t they use their own revenue? Why can’t they capitalize on the use of the spectrum to improve things throughout the State and the Nation? Why must the revenue be restricted to just reinvesting into FirstNet and private investors? That makes no sense. That’s like opening up your own super market, but not letting anyone to collect revenue from sales.

Second, if you read the law it specifically states:
(1) IN GENERAL.—A State that chooses to build its own radio access network shall not provide commercial service to consumers or offer wholesale leasing capacity of the network within the State except directly through public-private partnerships for construction, maintenance, operation, and improvement of the network within the State.
(2) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed to prohibit the State and a secondary user from entering into a covered leasing agreement. Any revenue gained by the State from such a leasing agreement shall be used only for constructing, maintaining, operating, or improving the radio access network of the State.

In short, when FirstNet says that a “State can’t use the revenue” this is in fact a lie, or at least misinterpretation of the law. Through a Public Private Partnership, and/or a lease agreement, the State can use the revenue generated off the use of the network.  I will give them the benefit of the doubt and say that what FirstNet is trying to convey is that the States that Opt-out, should not think if the network as an open spicket of revenue for the State. Now this seems to be the gallant thing to do, if you know there will be nefarious activities that will follow. But, how will FirstNet ever try to enforce such a rule? I can just see it now; FirstNet tells Texas they can't use the D-Block spectrum anymore because funds are being used for building roads, thus Public Safety is hit with statewide outages causing chaos.

That’s looking at the glass half-empty. If you look at the glass half-full we should encourage the generation of revenue for the State, because the increase in revenue means more support for Public Safety, the economy and the market place. In fact, any share of revenue that the State acquires, through the use of its Public Private Partnership, should be prioritized and re-invested into Public Safety, but also be allowed to flow into other needy programs within the State, such as Healthcare, Schools, Transportation, the Elderly, etc.. Anybody that would deny such use of the revenue, isn’t understanding the complete outcome of what the network can produce.

You will also note that within the law it really doesn’t address the private side of the Public Private Partnership -- it only addresses the State and FirstNet. The fact is that any primary investor that funds the Public Private Partnership will, in fact, obtain its own rights to equitable shares within the invested entity, thus equivalent in revenue distribution. In short, if anyone wants to invest their own money into a State Public Private Partnership to design, build, operate and maintain the State’s Public Safety Broadband Network, then they will be able to generate revenue off their equitable share of ownership. So I ask once again, why constrict the States revenue portions to just Public Safety and FirstNet? All you are doing is limiting your own self for no real reason at all.

You should note; anyone can invest into the State’s DBOM Public Private Partnership, and should be encouraged. Why? Because a statewide hardened infrastructure that supports all forms of connectivity should be open to all market participants, i.e. local, regional, national carriers, local utilities in the likes. Plus, it allows those same participants to save on owning the assets, increases their coverage, and thus revenue which can only improve the local economy with more investment and job creation statewide.

But whom am I other than….

Just some guy and a blog….

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