Wednesday, June 28, 2017

FirstNet -- Rivada takes Michigan away from AT&T? Rivada also took New Hampshire. Is the AT&T bid falling apart already?

So, anybody interested in FirstNet must already know that Rivada got best proposal in Michigan. You can read about it in an article entitled, ““Michigan Recommends Analyzing Rivada’s Alternative Bid with FirstNet State Plan”. In fact, Macquarie and Crown Castle didn’t even make the cut. This is great news for Rivada, in that it has now captured two States – New Hampshire and Michigan. The only problem is that the States may have cut themselves short. Allow me to explain.

Let’s go back to New Hampshire. The New Hampshire RFP had 5 bidding parties, Michigan had 3, and Colorado had 2. You see no real serious bid, not discounting those that did bid, are going to commit the resources and the money to responding to a large RFP like Michigan’s, Colorado’s, or New Hampshire’s without a true commitment to award. Without a true to commitment to award, all these early “Opt-Out” solutions are not getting the responses they would have if the award was a sure thing. I’m afraid that FirstNet, and all the negative press along with the good, has muddied the waters so much that no serious proposal will be made, thus the reason even FirstNet didn't get all the bids it should have. 

Having worked for a few Billion dollar entities, who were perfect for these RFPs, the going mood was one of “is it really going to happen?” Such an attitude from these major players sheds light on what’s going on in the background. None of these companies, especially following the collapse of the telecom market back in 2000, which is still fresh in their Boards mind, were willing to bet on a statewide telecom project, especially one to which the State was unwilling to commit. All of this brings back bad memories of huge losses. In the end, if the States want a real bidding party, then they need to commit and make a true effort through declaring an “Opt-Out”. There is nothing to gain from this point forward with a State holding out to see what FirstNet is offering. The offer is there as of last week. If you Opt-in you get a commercial carrier service offering -- one you already have. On top of that, if you want to build out the network to cover the rural areas, then you will have to pay for it.

With FirstNet you get to use the commercial network, that’s all. For States like New Hampshire, that is primarily covered by Verizon, making the change to cut all Public Safety contracts with their existing carrier and move over to the AT&T deal just doesn’t make sense. Even if they were to cut all ties with Verizon, AT&T has no real investment in infrastructure for the State, that would mean that FirstNet would have to justify building out in New Hampshire for commercial reasons, why? Because all their existing infrastructure is commercial, not Public Safety. Any buildout for commercial service has to be justified and weighted against its market competition, in this case AT&T would have to sell its requirement to its shareholders that they must invade a Verizon stronghold...is it worth it?

Given these types of scenarios, it makes no sense as to why a State doesn’t just publically state that it will Opt-Out and publicize a commitment to build a statewide broadband solution with a Public Private Partnership. The only people who are getting hurt from a State not committing, is the State and its taxpayers. 

The reason New Hampshire got only five bidders in its RFP was one, because it was relatively fast to market and no one knew what the offering was really about; two, no one really knew what FirstNet was all about and FirstNet was telling the market to wait for their proposal. If New Hampshire were to publically state that it is indeed choosing to “Opt-Out” of FirstNet, then repost the RFP, I can guarantee you they would get more than 5 bidders…and those bids would be much more attractive to the State. The same would go for Michigan, Colorado, and Alabama.

For those States that still have not awarded, or have not advertised an RFP Opt-Out solution, then take heed. It’s better to just make the commitment to Opt-Out than to tease the market and ruin your chances of getting any really viable bids. In the end, if I were in a State’s shoes, I would have to really analyze the past performance of having a federally subsidized program come in and build your Public Safety solution. What was the success factor in those endeavors? What is the record of success for such arrangements? Do you take the chance and do nothing, falsely obligating FirstNet and AT&T to come into your State and corrupting the use of your spectrum? Once the service is commissioned in your State, then the box of Pandora has been tilted towards upending your commercial markets for all the carriers, carriers you most likely already have Public Safety contracts with. You will also be missing out on a great opportunity to incentivize a commercial broadband market to your constituents for the foreseeable future. Are you willing to take the risk? It will be your name on this decision forever? Listen to someone who has been building broadband solutions for almost 30-years now, if I wouldn’t use the Federal program to build my telecom/broadband solution, then why would you?

Be wary of those leading with gifts of which they is no debt, you are most certainly being driven towards a demise you can not control.


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Moto

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