Deloitte: FirstNet and the public-private model
Brett Haan, Kevin Thompson and Craig Wigginton
Since the 9/11 attacks, Hurricane Katrina and, most recently, Super Storm Sandy, the need for an interoperable national public safety communications system has been well-known. Last February, Congress took the important step of committing funds and spectrum and resources to this goal. Yet the political capital expended will be wasted, and public safety potentially compromised, unless there is greater cooperation among state officials, federal agencies and commercial telecommunications firms.
Congress created the First Responder Network Authority (FirstNet) as an independent entity to plan and build a National Public Safety Broadband Network (NPSBN). Although it is an enormous task, the NPSBN can become a reality--if the FirstNet board accepts two premises: 1) the NPSBN must be state-centric, addressing the needs of its primary users, and 2) a successful build-out requires collaboration with states, federal entities, and commercial telecommunications carriers. Understanding and balancing the perspectives of these groups is vital to building, operating and paying for FirstNet.
Most importantly for the wireless industry, FirstNet could become a test-bed for new public-private partnerships that would open spectrum for commercial use, with substantial implications for the future wireless broadband economy. Being at the leading edge of spectrum-sharing could benefit not only FirstNet but overall wireless economic development. This will only happen if FirstNet strikes the appropriate balance between public and commercial interests. It must make the opportunity attractive for both commercial participation and states: Without them FirstNet may stumble; with them FirstNet could become an innovative model for wireless broadband. Encouraging states and commercial carriers to create their own partnerships may be the best answer.
State involvement is crucial. As Sandy revealed, governors and mayors are the frontline in any disaster. They know their existing communications infrastructure and understand their unique public safety needs. For example, Western states with vast rural areas and federal lands have different requirements than major cities. A cooperative approach could leverage state relationships with other entities--such as utilities and the National Guard--whose existing communications infrastructure could speed the NPSBN construction, reduce costs and provide additional paying customers. Congress mandated that FirstNet must cover the nation, rural and urban, and that the governor (or other designated state officer) be FirstNet's point-of-contact for city, county, regional and tribal entities.
For governors, NPSBN presents fiscal, procedural and philosophical concerns. States will be paying for it, and to some, FirstNet looks like another unfunded federal mandate. In a bi-partisan letter sent to the administration and FirstNet this summer, the National Governors Association outlined its concern, saying appointments to the FirstNet board "failed to provide states with adequate representation." Indeed, 33 states filed comments with the administration regarding state participation and the need to leverage existing investments. Minimizing state participation in the planning of FirstNet will alienate the very people who will be the primary users--and paying customers.
While FirstNet's license is for the 700 MHz band, governors take a holistic view of broadband issues in their states. For example, state and local entities are already struggling with the mandate that public safety move off existing public safety radio spectrum, the T-band. T-Band and FirstNet must be considered together--they came from the same legislation and involve the same users. T-Band affects a half-million police across virtually every major U.S. city. These cities lack adequate funding or guidance for replacing radio systems to move to an as-yet-unspecified spectrum band. FirstNet cannot be divorced from the concerns of major cities and should understand state skepticism toward new federal directives.
Recognizing that governors best know their states, the legislation allows states to build and run their own portion of the NPSBN, effectively "opting-out" of FirstNet, provided they meet FCC guidelines for interoperability. Utimately, governors will do what is in the best interests of their states. Because FirstNet needs states more than states need FirstNet, it cannot afford to alienate them by taking a stance on opt-out. The goal must be a collaborative working relationship, whether opt-in or opt-out is best for the state.
Collaboration with various federal entities, especially the Department of Homeland Security (DHS), is also important. A recent executive order gives DHS a leading role overseeing broadband communications during a crisis. Consistent with this mandate, DHS could assume a greater leadership role on the FirstNet Board, representing and giving greater voice to other agencies that are important for the success of FirstNet. FirstNet should also look to other federal agencies, such as the Defense Information Systems Agency, Federal Aviation Administration or even the U.S. Postal Service (USPS), for alternatives to building out its own core network. USPS, in particular, has experience providing nationwide service at a local level, including rural America. Working with other federal agencies will help FirstNet leverage existing Federal investments and potentially bring in new users.
Beyond public-sector collaboration, creating a viable public-private partnership requires engaging the commercial community. Shared commercial use of the 700 MHz band controlled by FirstNet represents an important source of revenue to offset capital expenditures and operating costs of the NPSBN, but potential partners need clear guidelines to determine if participation is economically viable. For example, the commercial rights-to-use relative to public safety use shapes the revenue potential for commercial service. Fundamental questions about what types of events constitute public safety use, how the "start" and "end" points of these events are determined and by whom, and what the public safety use profile might be during these events must be addressed for carriers.
Operational requirements and investment needed to build and operate the network are equally important to its sustainability. For example, to meet public safety standards under emergency conditions, how robust must the network be and under what conditions must it operate? Technology and operational standards already in use in the commercial wireless industry are, in some cases, inadequate for public safety, as the outages during past disasters have demonstrated. But hardening the system (e.g., deploying cell towers and operational infrastructure that can withstand hurricane-force winds and flooding) will require substantial investment that must be supported by a commensurate revenue model. With uncertain costs and opaque requirements, carriers cannot be expected to make open-ended commitments to a nationwide network. FirstNet won't get the carrier participation needed to make the NPSBN a reality without clarity on these obligations.
FirstNet is an imperative for nationwide public safety and disaster response. It is a complex undertaking, yet FirstNet can successfully build out a viable business and public safety model if it bridges the cultures and establishes a collaborative working relationship with states, federal agencies and the commercial community. In a report entitled, "What Should FirstNet Do First," former FCC Homeland Security Bureau Chief Jamie Barnett identified that the risk to FirstNet is not that states "opt-in or -out" but that states and commercial carriers simply ignore FirstNet. We cannot afford a repeat of the last D-Block auction, where intricate plans were built in a vacuum, and ultimately rejected, when commercial firms did not bid. One way to avoid this is to encourage states and carriers to partner at the local level. We cannot afford to squander this national asset nor fail our First Responders.
Simply put, FirstNet needs state, federal and commercial participation, and it needs to act now to secure it.
Brett Haan is principal with Deloitte Consulting LLP; Craig Wigginton is U.S. telecommunications sector leader for Deloitte LLP; Kevin Thompson is senior manager, Deloitte Consulting LLP. As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.