Despite some concerns regarding former ties between some appointed board members of the First Responder Network Authority and leading U.S. mobile operators, a FirstNet spokeswoman says there are no conflicts of interest that might impact development of the nationwide public-safety broadband network (NPSBN).
Some observers allege that a cozy relationship exists between certain FirstNet board members representing telecom interests and mobile carriers, particularly Verizon Wireless (NYSE:VZ), and that a secret plan has been drawn up under which the NPSBN will be built out using Verizon's network resources.
During a regional meeting held in Denver during late May, FirstNet board member Jeff Johnson denied that the authority has already created a business plan or has decided upon the network design. "You'll know when we have a plan when we vote on it," he said, according to MissionCritical Communications.
However, FirstNet Chairman Sam Ginn's financial history with AirTouch Communications continues to fuel rumors of potential conflicts. AirTouch eventually morphed into what is now Verizon Wireless. Vodafone Group holds a 45 percent stake in Verizon Wireless, which is owned 55 percent by Verizon Communications.
Ginn's actual gain from Vodafone's offer to take over AirTouch is fuzzy based on news reports from the time. A January 1999 article in The Guardian said Ginn--then Airtouch's CEO and chairman--stood to reap more than $450 million, while an amended January 1999 New York Times article valued Ginn's AirTouch shares and options at about half that amount.
Specific numbers aside, Ginn, who subsequently became chairman of the merged Vodafone AirTouch, gained a substantial fortune from the merger.
Other FirstNet executives with AirTouch/Verizon ties include Bill D'Agostino Jr., FirstNet's general manager, who was previously executive director of networks for Verizon Wireless in Southern California; FirstNet board member Craig Farrill, former CTO for Vodafone AirTouch; board member Sue Swenson, former president and CEO of Cellular One, the joint venture between Vodafone AirTouch and AT&T Wireless; and board member William McKeever, ex-CEO of Vodafone Asia and who earlier held leadership positions at AirTouch.
FierceBroadbandWireless asked the Department of Commerce's National Telecommunications and Information Administration, which oversees FirstNet, whether Ginn or other appointed FirstNet board members have financial stakes in any U.S. mobile operators that might lead to conflicts of interest in designing the 700 MHz LTE-based NPSBN.
"Prior to the formation of the FirstNet board, the Department of Commerce and the National Telecommunications and Information Administration thoroughly vetted each board candidate to identify whether any had conflicts of interests. Board members are also subject to financial disclosure rules. Mr. Ginn has fully complied with the requirements of the board," replied a FirstNet spokeswoman.
After this story was published, the spokeswoman told FierceBroadbandWireless, "Sam Ginn has no holdings in any telecommunications stocks or telecom equipment manufacturing stocks."
Bylaws adopted by the board in September 2012 state, "Each appointed member of the FirstNet board shall act in the best interests of FirstNet, regardless of any current or former outside activity, employment or affiliation." Yet, because FirstNet is not a regulatory body, board members are not required to divest ownership in telecom service providers.
The situation is different at the FCC, where Tom Wheeler, President Barack Obama's nominee to become the regulator's chairman, recently agreed to sell his holdings in AT&T (NYSE:T), Verizon Communications, Sprint Nextel (NYSE:S), Clearwire (NASDAQ:CLWR) and other companies to resolve possible conflicts of interest before taking office, according to Bloomberg.
FirstNet's board is scheduled to meet June 4 in Westminster, Colo. On the agenda is an update from board member and former Denver Mayor Wellington Webb, who heads the Special Review Committee set up last month to investigate whether FirstNet's board has complied with federal rules that apply to its hiring, sourcing and meeting practices.
The review committee was initially sought by board member Paul Fitzgerald, sheriff of Story County, Iowa, who alleged a number of improprieties, conflicts of interest and questionable backroom dealings at FirstNet during an April 23 board meeting. Fitzgerald is not expected to attend the June 4 meeting due to a medical situation.
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This article was updated on June 4, 2013, to add further comment from a FirstNet spokeswoman, who clarified that FirstNet Chairman Sam Ginn has no investments in telecom industry stocks.