Wednesday, February 22, 2017

FirstNet - The Wolf in Sheep's Clothing?

I just read Donny Jackson’s latest article on Urgent “Five years later, public safety can see a light at the end of FirstNet tunnel”. It’s a close recap of the history of FirstNet, but I find issue with the following statement:

“While that is a possibility, Wilbur Ross—the commerce secretary nominee, who is expected to be confirmed next week—has expressed support for the “concept” of FirstNet. The fact that FirstNet is designed to benefit public safety and is a public-private partnership that requires no additional federal funding also should be attractive to the White House and Congress. In other words, unless the administration or Congress believes it could drive an even better deal, it’s hard to imagine there would be much desire to undo FirstNet at this point.”

This can’t be further than the truth. The text below is a cut-n-paste from the law itself. If you are an “Opt-In” State, you will be charged. I explained all of this in a few articles but the following addresses the topic with a little more info. The article was entitled “FirstNet - Transparency issues here, the Law says that an "Opt-In" State will pay "its portion" of the FirstNet "Opt-In" solution!

HR 3620 Section 6302 (e) STATE NETWORK —(1) NOTICE — Upon the completion of the request for proposal process conducted by the First Responder Network Authority for the construction, operation, maintenance, and improvement of the nationwide public safety broadband network, the First Responder Network Authority shall provide to the Governor of each State, or his designee—(A) notice of the completion of the request for proposal process (B) details of the proposed plan for build out of the nationwide, interoperable broadband network in such State; and (C) the funding level for the State as determined by the NTIA.

In short, if a State decides to “Opt-In”, then it will pay, with its own state taxpayer funding. What FirstNet is offering is a sheep in wolf’s clothing. For a statement to be made “that requires no additional federal funding” is a dubious, implausible and very misleading. Does anyone believe that AT&T would come in and build out a network to the rural areas on their own dime? AT&T only covers 42% of the geographic landmass, thus 98% of the population. Why? Because the population is what the carrier model is focused on…not geography…FirstNet is focused on geography.  This means 58% of the geography is not covered and has to be on someone else’s dime. Whose dime will that be on? All FirstNet continues to do is try to mix water with oil.

Even the cost for the metro areas will deplete the budget….and quickly. The biggest cost in building out a broadband wireless platform is the power.  Just to retrofit existing towers in the metropolitan areas will suck up most of the money because the commercial standards are driven by 8-hour backup power generation; Public Safety Broadband will be three times that (ref: NPSTC Report 2012). This means even the metro installs will be three times the cost they are today. The biggest contributor to the commercial AT&T market is the consumer – there isn’t enough revenue to justify building out to the rural areas for a commercial entity. There isn’t even enough to justify building out the metro environment that would make sense to a carrier. There is a reason the carriers (all of them) build to 8-hour backup power, that’s because it’s the break-even point to capture margins on its current users. Who will make up the difference in lost revenue? The taxpayer!

You see FirstNet believes that AT&T is going to pay them about $5 to $6 Billion a year to access the spectrum, but they fail to realize that the cost for the network, plus its long term operations, will cost way above $100 Billion. There isn’t enough revenue to be made that could recapture the investment made, thus somebody will have to pay. I can assure you that AT&T will not pay for a network that will never produce enough revenue to recoup its capital and produce a good stream of revenue.

The only way the Public Safety Broadband Network can avoid any further taxpayer money, is through a Public Private Partnership at the State level that creates its own privately owned broadband company.

Just some guy and a blog……

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