Wednesday, December 7, 2016

FirstNet -- AT&T wins the RFP! Who would have guessed? True colors come out?

As was predicted for some time now, AT&T is the lone finalist of the FirstNet RFP. Did anyone suspect that it would go any other way? From the day one and the presentation made by Craig Farril. Back in May of 2013 I noted that FirstNet was hiding the fact that they already had an agenda for how things will go.

“Maybe it’s not a “business plan”? Maybe it’s a strategy document that lays out just how a certain commercial carrier will obtain the spectrum allocated to Public Safety whose dubious plan it will be to augment their sell-off of their own burdensome assets to increase their profits while at the same time burdening the Federal and State taxpayers with holding the bag when they decide to exit?  Or maybe it’s an evil plan to undercut their existing competition by acquiring spectrum that they would normally have to bid for? How nice would that be to acquire the same spectrum you tried to bid on a few years back, but this time you can get it for free and let the taxpayers pay for it. Or, better yet, maybe it’s a 400-page recipe for a new broadband Hungarian Goulash soup?” (May, 2013)

Oh how times have NOT changed. The fact is FirstNet was doomed from the start. It was not so much the nefarious activities that were going on as it was just plain stupidity and lack of understanding.

“Why would we assume that just because we have 4 industry guys on the board, that have a tremendous amount of skill and experience in monetizing the use of commercial wireless, that they would have any other intentions other than creating a Private LTE network -- with limited users on the most valuable spectrum in the world -- just for Public Safety? Reminds me of a joke about a scorpion getting a ride on the back of a turtle…”

The belief that you can build a network from the top-down (federal) was never a sound plan from the start. But, ideologically those appointed to the board were wrapped in the same cloth as those within the highest realms of the administration. To them there is no other way of building this network other than from the federal level – which can’t be further from the truth. Now we are faced with their only alternative while facing failure – for the third time – call on the carriers to help them out.

“What if a commercial carrier signs up to partner with FirstNet by expanded infrastructure only to have the Federal and State taxpaying mechanism fall short of its planned objectives? Who will be left holding the bag? My bet the carriers.

If I were a carrier and I had $30 Billion invested in the stacked technologies of 2G, 3G and now 4G consolidated into huge infrastructure costs...why would I want to just add more infrastructure on top of what I already have? Especially when I’m actually trying to reduce the overhead of my infrastructure so that I can reap the benefits on selling the more lucrative content and services that deliver a better ROI than the ever decreasing ARPU (Average Rates Per User).

…Why would FirstNet continue down the path of believing that a commercial carrier relationship is what they need to deliver the Nationwide Public Safety Broadband Network? The first thing that comes to mind are ideas of grandeur, or maybe just the lack of experience. Or maybe their plan is starting to fall apart...what then? The reality is that if you don’t funnel your idea based off a viable business model you will be taking everyone down a path of confusion that will ultimately lead to a lack of confidence in your actions. Is that what's happening now? I mean we've been hearing the same message now for the last 9-months. To me it's a matter of fact that the industry is losing faith and the reality is setting in. Everyone is starting to realize that if anything is going to get done with FirstNet -- it will have to happen at the State level. Frankly would we think anything different? Can anyone name a Federal program that actually works?” (June 2013)

The fact remains the same, what Public Safety needs is a baseline model of creating their own – and I stress their own – broadband network by creating their own broadband company through a Public Private Partnership, then let the State’s manage their own build-outs through a similar framework of execution and approval. The carrier, AT&T in this case, model is not a fit for Public Safety. Falling back onto the carrier model only because you failed to understand what needed to happen on your part, and the fact that you were up against impending deadlines of a change of administration, is not a good enough reason to give up the reigns of a wagon that doesn’t belong to you.

In reality FirstNet stands a better chance of collecting more revenue by partnering with the State’s than trying to do it alone. But it's starting to look like FirstNet is trying to utilize $7 Billion in grants and spectrum sales just for the sake of spending...what really scares me is that they might not even know it. If they were to just allocate the spectrum to the States and then take a share of each State’s P3 model – the model I promote – to which they could reap the benefit of much more revenue than they would have ever experienced otherwise. Plus, the taxpayers could get their money back – our money back. Time for FirstNet to gravitate to my model that let the State’s lead the effort of monetizing the spectrum for the own use….a shared effort of FirstNet and the State.” (June 2013)

In July of 2013 I stated FirstNet has positioned themselves to give the $7 Billion in taxpayer money to help harden the carrier class networks so that they can install their own antennas then interface with the commercial carriers to deliver their own "service" functionality to the First Responders and Public Safety users. At the same time they will leave the purchase of handsets to the State's public safety community as well as its taxpayers for the long-term maintenance. What's different in that model than just giving the money to the corporate carrier industry to build it and run it for them? Don't the Public Safety entities within a State already have commercial service contacts anyway? Why do they need just another commercial based subscriber fee to access a private LTE network? Who will be held responsible for this solutions long-term plan -- the State? The taxpayer! What happens when another large incident happens and the users who declined the service aren't on the network?

FirstNet’s decision to go stale on its progress only indicates that they are out of options and are relying on those carrier lobbyists to come through on the promise they made in the beginning, but will it happen? AT&T, who is the finalist for FirstNet’s RFP – and you note I state “FirstNet’s RFP” not Public Safety’s RFP – is involved with one of its largest mergers to date. What will a President Trump think about such a conglomerate controlling most of the industry in both the MSO (cable) and fiber market places? What will he say with AT&T controlling most of the spectrum allocations in the United States? Isn’t this how the RBOCs were originally established? Too big to fail?

It was never a doubt to me that if FirstNet stayed the course with its original plan to partner with the carriers, that we would be in the position we are today. You can’t blame AT&T! After all, if I were with AT&T I would be doing the same thing, but even they have to ask themselves, “do I really want to control that much of the market?” Do I really want to over expose myself and risk getting isolated and cut-up by the federal government – again -- as being too much of a corporate conglomerate with way too much ownership of the industry? How do I convince people that if you change the name from “AT&T” to the “Federal Government” it’s not what it seems – especially with a conservative leading party in control? It was good with a centralized ideologue in the Whitehouse who believes in big government, but now the game has changed. How do you convince your next boss that you are open to free markets and competition when you own the market?

The only real solution for FirstNet – not the Public Safety Broadband Network – is to go into a wait-and-see mode. Why risk causing more damage to Public Safety than has already been done. We’ve wasted enough resources and money chasing this rabbit down the hole. Stop confusing the markets with inaction and obvious impediments to how the broadband market really works. In the end, I can guarantee that a lot of the appointed leadership will be looking for commercial jobs in the future, so why burn the bridges now.    

But whom am I other than….

Just some guy and a blog…..

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