FirstNet deems 'Industry Day' a success as financial challenges loom

More than 425 representatives from federal, state and local jurisdictions, as well as vendor community participants, showed up either in person or via webcast for the First Responder Network Authority's (FirstNet) first "Industry Day."

The purpose of the meeting was to discuss FirstNet's Special Notice and draft Request for Proposals (RFP) documents. It was held at FirstNet's headquarters in Reston, Va., on May 14. FirstNet began accepting requests for one-on-one meetings with vendors on May 15.

The event was a key next step in FirstNet's ongoing efforts to consult with interested parties on acquisition matters regarding the development of a nationwide public safety broadband network (NPSBN), according to the organization. It included interactive conversations and an overview of the Special Notice and draft RFP documents by FirstNet officials, as well as questions and feedback from participants.

"We are pleased with the attendance – both in-person and on the webcast – and the quality of our discussions," said FirstNet Acting Director TJ Kennedy in a press release. "It shows there is a great deal of interest from market participants and the public safety community in establishing the best possible network for public safety."

Two years ago, FirstNet came under fire from those who accused the organization of shutting out the public-safety community from the planning process. Since then, it's been the subject of a Department of Commerce Office of Inspector General investigation, a Senate hearing on its progress and more recently, a U.S. Government Accountability Office (GAO) report.

FirstNet has been holding state-by-state consultations. On Industry Day, officials from FirstNet's acquisition, finance, technical and state planning teams joined Kennedy in delivering presentations and addressing participants' questions. During the overview, significant attention was paid to information about FirstNet's business model vision, IWCE's Urgent Communications reports.

FirstNet has only $7 billion in federal funding, an amount that many say is far too little to run a sustainable nationwide network. But FirstNet officials believe financial sustainability is achievable because it has significant assets at its disposal.  The organization can pursue avenues like getting revenue from user fees and secondary use of network capacity by commercial users.

John Quinlan, FirstNet's deputy chief financial officer for strategic planning, said FirstNet believes it could have 4 million to 13 million public-safety users on the network, with the variance depending on adoption and the definition of a "public-safety entity" that qualifies to be considered for priority access to the system. A fee structure of $30 per user per month "would yield over a billion to $3.5 billion per year," he said, according to Urgent Communications.

One advantage of FirstNet's spectrum is it's largely unencumbered and is potentially immediately available upon award, whereas AWS-3 and TV spectrum that is scheduled to be auctioned next year will take more time to be cleared and secondary-market spectrum transactions also can take years to execute, according to Urgent Communications. Plus, FirstNet's 700 MHz spectrum is considered ideal, both for coverage and data capacity.

The GAO report released last month notes that estimates to construct and operate the network range from $12 billion to $47 billion over the first 10 years. The actual cost of the network will be influenced by FirstNet's business model, among other things. If FirstNet's user fee is too high, it could hinder public safety adoption, and if it's too low, it could bring in too little revenue.

FirstNet can generate revenue through commercial partnerships, but the extent of such partnerships are unknown. Using the existing carrier networks would make economic sense, but one major carrier the GAO officials spoke with said no business is likely to enter into a partnership with FirstNet because its public safety user base has not been defined. The risk would be too high for a commercial entity to enter into an agreement without knowing exactly how it will be able to use FirstNet's network, and if public safety preempts all commercial traffic, then the commercial entity would struggle to generate income and could lose favor with customers.

The financial questions around FirstNet could prove harder to answer than some others. FirstNet initially delayed the release of its draft RFP due to outstanding questions from the finance committee after other committees, including technology and outreach, had signed off on it. FirstNet's board approved the draft RFP last month after those questions were addressed.

For more:
- see IWCE's Urgent Communications article
- see this release

Related Articles:
FirstNet sets 'Industry Day,' starts taking one-on-one meetings with vendors
FirstNet board OKs draft RFP, setting comment period in motion
NTIA suspends funds for Los Angeles' public-safety LTE network
FirstNet delays draft RFP, cites finance committee questions
FirstNet RFI, public notice lay groundwork for network procurement

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