After reports last week about Rivada Mercury’s protest over no longer being in the running for the FirstNet contract and pdvWireless’ previous disclosure that it was no longer in contention, AT&T very quietly (how else?) submitted an 8-K to the SEC saying it is not aware of any other bidders who remain in the “competitive range” of getting the contract.
All of which is to say, AT&T is likely going to win the right to provide the nation’s first broadband network dedicated to public safety. FirstNet hasn’t officially announced anything yet, and no doubt it needs to let court proceedings run their course. But ultimately, it means AT&T could win a 25-year contract to use 20 megahertz of 700 MHz beachfront 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.
Rivada is contesting its exclusion from the contract and hopes to be considered again, but a lot of people, including those in the public safety community, believe that it’s already lost. Its legal protest in federal claims court could push any real work on FirstNet back to possibly next spring, in which case the public safety community continues to wait. “The loser will ultimately be Rivada Mercury regardless of whether it wins or loses in the court of law,” writes industry consultant Andrew Seybold in his PSA Advocate Special Edition emailed yesterday. “I believe Rivada has already lost in the courts that matter most, the Public Safety community it has said it wants to serve and FirstNet.”
While it’s mostly bad news for Rivada Networks, it’s positive news for tower companies because the network deployment will drive a lot of activity not reflected in current consensus estimates, according to New Street Research analysts Johnathan Chaplin, Spencer Kurn and VIvek Stalam.
And if AT&T gets access to FirstNet’s 20 MHz of low-band spectrum, its interests in similar low-band spectrum in the 600 MHz auction likely will be diminished, the analysts said in a research note on Friday, which may result in lower auction prices overall and allow other participants like T-Mobile US and Comcast to acquire spectrum at more attractive values. Yay for them.
Regardless of who wins in court, Nokia and Ericsson—which are part of the Rivada Mercury consortium—stand to win in terms of the FirstNet project. They’re long-time vendors to AT&T and other operators, and I’d be surprised if they aren’t part of this in some pretty big ways if AT&T wins the prize. It remains to be seen how others fare in the Rivada Mercury group, which besides Rivada Networks includes Intel Security, Harris Corp., Black & Veatch and Fujitsu Network Communications. It’s pretty widely expected that whoever wins the deal, a whole slew of partners will need to make the whole thing happen.
I’m not sure why Verizon seemingly dropped out of the race or how much it was ever planning to be in the race. But if AT&T is ultimately named the winner, it will get the chance to really prove its mettle. There’s no room for mistakes when it comes of public safety, and it will be taking on a certain degree of risk and liability. But it’s also an awesome and fantastic opportunity to demonstrate advances in technology and how technology can save lives.
Just last month, FirstNet announced the opening of the FirstNet Innovation and Test Lab at its technical headquarters in Boulder, Colorado. FirstNet’s lab will serve as a “plug and play” environment where FirstNet and its future private industry partner will test public safety features, devices and apps before they're deployed on the network. FirstNet CEO Mike Poth called it a great accomplishment for FirstNet, enabling FirstNet to get advanced technology into the hands of first responders and help them save lives and secure communities. The lab is ready and waiting for its partner to install equipment and begin testing.
With that said, it’s worth noting Seybold’s call for caution. He says expectations are way too high for the first nationwide dedicated public safety network, and there’s not a commercial network that exists in the world today that functions the way it did when it was born. “It’s evolutionary,” he told me, and it will take time to fill in coverage and capacity gaps and overall fine-tune the system. After all, this has never been done before in the U.S. and there are a lot of reasons for that.
It’s anybody’s guess what the incoming administration in Washington, D.C., will mean for the organization and its lofty goals. FirstNet has come a long way, and it’s still got a long way to go. But finally hearing a likely winner emerging is encouraging after FirstNet’s long-fought battle. – Monica