Thursday, September 22, 2016

FirstNet scares the Opt-Out States by saying they will not be able to meet the 180-day timeframe to put their plan together? What a bunch of bullarky!

You know I hear a lot of talk, and see a lot of apprehension, about this 90, plus 180-day thing for a State to get its plan together. I don’t know where all the hoopla is coming from, but the law doesn’t state anything about a State has to get its entire plan together within that time period. Here is what the law states:

HR 3620 The Middle Class Tax Relief and Jobs Creation Act of 2012 (Feb 28, 2012)

(B) STATE REQUEST FOR PROPOSALS.—Not later than 180 days after the date on which a Governor provides notice under subparagraph (A), the Governor shall develop and complete requests for proposals for the construction, maintenance, and operation of the radio access network within the State.

You can see that the law only says that a State has to have its RFP completed for the construction, maintenance and operation of the network. Nowhere in the law does it say that a State has to have its complete plan done -- it just says you have to have your RFP done -- and done so within the 180-days. If you don’t know what an RFP is its essentially a request made by the State for a proposal, thus the term “RFP”.

Now the State has two options to choose from when considering its RFP course; it can use a traditional taxpayer funded bonded program, where it puts together a complete of listing of technical specifications, requirements, and cost obligations, that a responding party would propose a solution for. These types of RFPs are quite common in the vertical industries, especially as they relate to large-scale construction jobs that have little return on the investment, so the government would support its development and charge the taxpayers for the bill. In this case of the government sponsored program the State, and its taxpayers, would fund the program, but when it comes to building out a broadband network, that can get rather expensive and the State is in no position to act as a broadband company.

The second solution is through the use of a Public Private Partnership or P3. The law even says that a State can use the P3 model to benefit from the revenue stream that the P3 creates.

(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.

In a P3, the Myers Model that is, the State is a member of the investment consortium who funds and owns a newly created broadband company within the State. Although, in this case the State, thus its taxpayers, are not required to bring any cash to the deal, but rather equate their ownership stake to rights-of-ways, land, and the use of the spectrum. The investment parties of the deal are the ones that fund the build and its long-term operations. You should further note, the law specifically states that FirstNet, not the State, must be completely self-funded and self-sustaining through an independent entity.  With the execution of the States use of their own P3, the State actually creates a completely self-funded and self-sustaining solution, whereas the proposed FirstNet model – to date – does not. But, FirstNet’s RFP has not been awarded yet, so we will see.  Given my knowledge and experience in telecom business models, it is highly unlikely that we will see such a model offered to FirstNet.

Therefore, the law does not state that the State must have a fully completed plan for construction, maintenance and operation of the radio access network within 180-days, just a completed RFP. If the State chooses to perform a typical Opt-Out bonded broadband program, funded by the State taxpayer, then the risk of the RFP timeframe falls upon the State. If a State develops an RFP asking for a P3 solution, then 180-days will suffice. As was the case for New Hampshire, and now Alabama, the scope of these RFPs call for a fully funded and self-sustaining P3 solution for a complete statewide deployment of Public Safety Broadband – covering all the State. The timeframe associated with their scripting, advertisement, and award, fell well within the 180-day timeframe.

But what the hell do I know I’m…

Just some guy and a blog….

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