Seybold's Take: Public safety's 700 MHz LTE network an opportunity for vendors
Over the next few years a new 700 MHz LTE network will be built and this one will provide LTE services to cover 96 percent of the U.S. population. However, you and I won't be able to access this network let alone make use of it because it is being built to provide broadband services to the public safety community. This network was authorized when the president signed the tax relief bill on Feb. 12. The public safety community has been working diligently for more than three years to convince Congress to reallocate the 700 MHz D Block to public safety, to fund the network with proceeds from future auctions, and to set up a nationwide governance organization to oversee the building and operation of this network. These efforts finally paid off.
What does this mean for the industry? First, the initial funding for the network will be $7 billion, which is certainly not enough to build a 44,000-site nationwide network, but it is a good start. This legislation also encourages public/private partnerships to help reduce the network costs. Some of these partnerships will be with commercial network operators and will include sharing of cell sites, high-speed backhaul, and in some cases the day-to-day operation and maintenance of all or a portion of the network.
During the past three years, both AT&T and Verizon Wireless have supported the public safety community in many ways and both companies have expressed interest in entering into public/private partnerships. T-Mobile, Sprint, and the Rural Cellular Association were on the side that wanted the D Block auctioned but now that the bill has become law I suspect that these companies and organizations will be interested in partnering as well, and I don't believe that the public safety community will hold any grudges going forward. The goal is still to build this network as quickly as possible with the funds available from the federal government and to augment those funds with public/private partnerships as well as state and local dollars.
There will be other types of public/private partnerships formed as well. For example, rural co-op power companies have expressed an interest in working with public safety to build the network in rural areas. The power companies already have right-of-ways, high-tension towers, and in some cases fiber that could be used for backhaul. What they want in return is to become secondary users on the network (also permissible by law) for their own needs including their smart grid requirements, and then be able to resell wireless broadband services to their rural customers. This is a win-win for everyone. The public safety members cannot directly sell broadband services to citizens where there is excess network capacity, but a third party can. The revenue derived from this will go the FirstNet nationwide operator for use in additional network build-out and to help defray the monthly costs.
It will be somewhat tricky to navigate all of the partnership options and to make sure that the network, which is designed to provide broadband services to the public safety community first and foremost, does not pose a competitive threat to the companies and organizations that helped support public safety nor to those who opposed the reallocation of the D Block. Having said that, this is a perfect opportunity to bring wireless broadband to rural areas where today the commercial operators simply cannot afford to build out by themselves. I believe this will sort itself out as we move forward and that the rewards will outweigh any perceived competitive problems.
Device vendors will also gain from this new network. New devices will be needed to serve the public safety network only (Band 14) or to also provide services on the AT&T and Verizon Wireless 3G and 4G networks when a public safety unit is out of its network's coverage (which will certainly be the case during network construction over the next three to five years). The public safety market is not huge when compared to the number of subscribers on a commercial network. Estimates of the total number of devices required within the next five years range from about 5 million up to 10 million, which to a device vendor is not an exciting market. However, in the law there is also a provision to fund research and development. This fund starts at $100 million and could grow to $300 million depending on the income produced by the next round of spectrum auctions.
All of this is good news for the wireless industry--$7 billion to start building out the network, public/private partnerships, and $100 to $300 million for research and development will spur new jobs and increased income for tower companies, infrastructure vendors, device vendors, software developers, and even existing commercial operators as part of public/private partnerships or because they will gain customers as more public safety personnel come into the broadband world.
One final note here. This new public safety broadband network will NOT replace land mobile radio for public safety mission critical voice anytime soon. It is being built as a broadband data network and over time, perhaps some mission-critical voice will become available, but that is well into the future. This opens the door for infrastructure and device companies to partner with companies that make land mobile radio devices for the public safety market. Some of these partnerships have already been formed and there will be many more opportunities for partnering as we move forward.
The public safety community will be leaning heavily on those within the commercial wireless sector that have "been there and done that" in order to learn how to best implement this network. Public safety and all within the wireless industry will benefit from this much-needed new LTE network as it is built and put into operation.
Andrew M. Seybold is an authority on technology and trends shaping the world of wireless mobility. A respected analyst, consultant, commentator, author and active participant in industry trade organizations, his views have influenced strategies and shaped initiatives for telecom, mobile computing and wireless industry leaders worldwide. www.andrewseybold.com.