The U.S. Department of Commerce awarded AT&T the FirstNet contract, giving the carrier the right to build the nation’s first nationwide wireless network dedicated to first responders. Finally.
The nation’s second-largest operator will get access to FirstNet’s 20 MHz of 700 MHz low-band spectrum and $6.5 billion for designing and operating the nationwide network for federal, state and local authorities, with the right to sell excess capacity on the system. AT&T will spend roughly $40 billion over the life of the 25-year contract to deploy and maintain the network, the Department of Commerce said, integrating its network assets with FirstNet.
“We are honored to work with FirstNet to build a network for America’s police, firefighters and EMS that is second to none,” AT&T CEO Randall Stephenson said in a press release. “This is an unprecedented public-private investment in infrastructure that makes America a leader and public safety a national priority.”
AT&T had long been viewed as the favorite to win the contract, although FirstNet had to clear some legal hurdles before awarding the contract to the carrier. The U.S. Court of Federal Claims ruled in FirstNet’s favor earlier this month, allowing the project to proceed without a contract award.
FirstNet had wanted to award the contract before the end of last year, but one of the bidders, Rivada, said it was wrongly removed from the list of potential contractors. The federal claims court rejected that argument.
Rivada has indicated it will appeal the ruling and is moving forward with plans to work with states individually to build dedicated networks for public safety. Indeed, Rivada has said it is already working with New Hampshire on an alternative plan for that state should it decide to opt out.
Regardless, the move provides a significant lift for a tower market that has languished in recent months amid speculation of looming consolidation among U.S. carriers.
“Simply stated, doing FirstNet together with AWS-3 and WCS will require one tower climb rather than two,” Nick Del Deo of MoffettNathanson wrote in a recent note to investors. “AT&T is the industry’s biggest single customer and its retrenchment over the past couple years has been the primary factor behind the slowdown in domestic leasing activity … The tight build timeframe associated with FirstNet—60% coverage within two years, 80% within three years, and so on—all but forces AT&T to utilize existing tower infrastructure and limits its negotiating leverage since it can’t afford to wait (the economics of leveraging its existing network also means existing sites will get amended, and the towers will benefit in proportion to the share of AT&T’s network that each hosts).”