FirstNet oversight hearing highlights different perspectives on opt-in/opt-out

In a hearing yesterday on Capitol Hill, representatives from multiple states and the First Responders Network Authority were quizzed on topics ranging from the potential costs looming over states that opt to control their own Radio Access Networks for the nationwide public safety broadband network, to how FirstNet will ensure that its commercial partner, AT&T, builds out rural coverage sufficiently and ensures cybersecurity.

The FirstNet oversight hearing was held by the House of Representatives’ Subcommittee on Communications and Technology, part of the House Committee on Energy and Commerce. Chairman Marsha Blackburn (R-Tenn) called the meeting in part as a response to a recent letter from the governor of New Hampshire, calling for a “pause” on the FirstNet opt-in/opt-out process that has a deadline of Dec. 28th, due to concerns about states’ financial risk if they opt out of the AT&T build as well as what Governor Christopher Sununu referred to as “some very important questions that still need to be answered” before states can make a fully-informed out-in/opt-out choice.

FirstNet has seen a number of new states opt in this week, with South Carolina and Pennsylvania making opt-in announcements this morning. Oklahoma yesterday opted in to AT&T’s network build-out. Those states joining 29 other states and territories who have decided to opt in to the build — which does not obligate first responders to move onto the FirstNet network.

Sununu’s concerns were echoed at last week’s Competitive Carriers Association Show, both on a panel about opting out of AT&T’s FirstNet build and during a keynote discussion with former governors Jeb Bush and Martin O’Malley. Both men sit on the board of Rivada Networks, which competed with AT&T during the bidding process and was ruled out, resulting in a lawsuit and Rivada’s declaration that it would take its fight to the states to persuade them that Rivada’s offering was a better deal.

CCA president and CEO Steve Berry offered a letter of testimony to the House subcommittee as well, saying that, “It is troubling that today devices still are being manufactured and marketed for use on the FirstNet network that are compatible only with AT&T’s boutique Band Class 17, a subsection of the interoperable Band Class 12. Further, some of these devices may not be compatible with the public safety spectrum in Band Class 14. This will result in limited roaming opportunities. Further, this could result in first responders utilizing devices sold for use on FirstNet unable to access a connection, in areas outside of AT&T’s commercial network (deployed on Band Class 17), where the public safety broadband network has been deployed on Band Class 14 spectrum.”

Additionally, Berry said, CCA is concerned about “AT&T using spectrum and funding provided by Congress for public safety use to eliminate commercial competitors.”

During the hearing, FirstNet CEO Mike Poth and Chris Sambar, SVP for FirstNet at AT&T, said that FirstNet has required AT&T to identify potential rural partners and will expect that the carrier relies on them for at least 15% of rural coverage; Sambar said AT&T is projecting that will be more like 20%.

One of the major points of contention has been that states face staggeringly high potential costs if they opt out and the network fails, leading to FirstNet having to take it over or possibly rebuild from scratch.

As John Stevens, statewide interoperability coordinator for New Hampshire, put it, “States are … being threatened with outrageous and indefensible penalties that deter states from even considering an opt-out decision.” New Hampshire, he said, has been informed that its termination penalty would range from $10.6 to $608 million. “Other states have been advised that their termination penalty payments will be in the billions and billions of dollars,” Stevens said. “Can we honestly expect that states could assume such risk, when all they are trying to do is represent their first responders by providing the best possible coverage? … These figures are absurd, and they are accompanied by spectrum payments in the tens of millions of dollars, adoption disincentive payments, adoption payment levels at 5 years, and adoption payment levels at 20 years. What are we promoting here, public safety and the ability to provide better service to our citizens, or lining the pockets of corporate America?”

Poth, however, noted that in opting out “states will assume all technical, operational, and financial risks and responsibilities related to building, operating, maintaining, and improving their own RAN for the next 25 years.” He added later that the spectrum management lease terms presented to the states were meant to be “working documents” that could be negotiated at a later time if a state did choose to opt out. While FirstNet wants to see opt-out states succeed, Poth added, it could be as long as two to two-and-a-half-years into the opt-out process before those terms would be formally negotiated and “we didn’t want states to get through a two-and-a-half-year process and then start looking at terms and say, ‘why didn’t you tell us this 2.5 years ago?'”

Brian Moran, secretary of Public Safety and Homeland Security for Virginia — the first state to opt in the FirstNet build — said that his state considered half a dozen responses to its request for information, and that none of the convinced that state that “opting-out was a viable endeavor.”

“Virginia would have had to oversee the buildout of a highly technical broadband wireless network and assume all responsibility, liability, and fiscal accountability, maintenance, and management of users and customer care,” Moran said. He added that “No one has been able to adequately assess the cost and unfortunately any profits would have to be reinvested in the network and would not have been able to serve as a revenue source for the state.”

Moran added that since Virginia opted in, “Fairfax County Fire and Rescue Department’s wireless devices were moved over to FirstNet, giving them priority service when they deployed to Houston after the flooding caused by Hurricane Harvey. Fairfax Fire and Rescue is currently piloting ultra-rugged broadband devices to replace standard smartphones and some two-way radios, and currently has interoperability between the public safety radio system and broadband with the push-to-talk application.” The state’s single point of contact for FirstNet has continued to hold regional conferences since the opt-in, he added, to keep communications with local first responders open.

Funding levels from the National Telecommunications and Information Administration are in the process of being cleared before they are publicly released, which should offer states some additional clarity on their financial position, should they opt out.

Verizon also weighed in on the subcommittee testimony, submitting comments by Donald Brittingham, VP for public safety policy at Verizon, which said that the carrier serves about 2/3 of the first responders across the country. Instead of adopting a state- or regional-based strategy  (which FirstNet considered early on and ultimately ruled out), Verizon acknowledged that FirstNet went with a nationwide single network strategy and that “instead of a network dedicated to public safety, it decided to support a commercial solution that relies heavily on monetizing the value of the 700 MHz spectrum licensed to FirstNet. For all intents and purposes, the FirstNet RFP was established as a spectrum deal, with the winning bidder required to commercialize the 700 MHz spectrum in order to fund the construction of a network. While Verizon understands the reasoning behind this decision, we chose not to respond to the FirstNet RFP. We have never had an interest in FirstNet’s spectrum and could not justify the investment required to build-out spectrum we had no intention of using commercially. While Verizon understands FirstNet’s decision to select a single network partner, we also recognize that FirstNet has a statutory mandate to ensure that states have a meaningful opportunity to make their own communications decisions including the ability to construct their own networks should they not wish to use the network built and operated by FirstNet and its commercial partner. … It is critically important … that states have viable competitive alternatives in either case.”

This story has been updated to include the most recent state opt-in decisions and Verizon’s committee comments. 

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