The U.S. House Subcommittee on Communications and Technology said it will hold a hearing next week to discuss states’ perspectives regarding FirstNet amid increasing pushback against the dedicated network for first responders.
Earlier this year, the U.S. Department of Commerce granted AT&T the right to build the nation’s first network dedicated to first responders. States have a legal right to opt out of FirstNet’s service, but if they choose another service provider, the network must be interoperable with FirstNet’s offering.
Verizon and Rivada Networks, among others, are positioning themselves as alternatives to FirstNet, and Rivada took direct aim at AT&T and FirstNet this week at the CCA trade show outside Dallas, with one member of Rivada’s board of directors referring to FirstNet’s proposal as “third-world thuggery.”
FirstNet has secured agreements from 27 of the 56 SPOCs—state single points of contact—it is targeting. Governors in 53 of those states and territories received initial state plans in June and must make final—and legally binding—decisions whether to use FirstNet by Dec. 28. No state has yet opted out of FirstNet, although approximately 18 issued requests for proposals from potential competitors.
Securing the FirstNet contract was viewed as a major win for AT&T, which will get access to 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.
New Hampshire Governor Chris Sununu earlier this month signed an executive order establishing an “opt-out review committee” that will examine the regulatory and financial risks to the state were it to decide not to go with FirstNet’s offering.
“As part of this review, we will seek clarification of certain proposed fees, as well as clarification of penalties that may be imposed by FirstNet if an opt-out were to fail,” Sununu said in a press release. “These fees and penalties appear to be arbitrary and primarily designed to deter states from opting out of FirstNet plans. That is why I am calling on key officials at the federal level to assist us as we examine the numbers released by FirstNet and to ensure that states are being afforded their right to make their decisions with correct information.”
Among other things, states are questioning spectrum manager lease agreements—SMLAs—that include hefty payments for opting out or terminating its agreement if they aren’t able to meet FirstNet’s technical requirements. Pennsylvania, for instance, would reportedly pay nearly $1 billion over 25 years to lease spectrum from FirstNet if it opted out, according to a recent report from Urgent Communications, and billions more if it didn’t meet technical and operational obligations. Similarly, California officials said opting out would require “an unrealistic number of subscriptions/connections” as well as nearly $3 billion in spectrum lease payments and more than $15 billion in penalties.
FirstNet said it is continuing to work with states and territories to be transparent as the clock winds down.
“FirstNet continues to work with the states and territories, as we have done for several years, to support their decision-making process on the plans and provide them with the information they need, as requested, to make the most informed decision for their public safety communities,” a FirstNet spokesperson told FierceWireless via email. “Everything we do is to ensure that public safety gets the nationwide, interoperable and sustainable network they fought for and need to save lives and protect communities for decades to come.”
But Sununu isn’t alone in his apprehension of signing on with FirstNet. The Governor’s Office of Emergency Services in California reported recently that “(A) review of state comments responses reveals little new information probative to the decision process,” according to one document. “Use of aspirational words, such as ‘intends,’ ‘welcomes,’ and ‘understands’ raises concern regarding AT&T and FirstNet’s commitment to California’s public safety stakeholders.”
California officials also said FirstNet hasn’t discussed metrics by which its performance can be gauged by the state, and cited a “lack of means to enforce the terms or details of the proposed plan.”
And the lack of clarity is a major concern for states facing a deadline in the next two months, said said Ken Rehbehn, a former firefighter and EMT who founded CritComm Insights, where he serves as principal analyst.
“Fees and penalties for opt-out are natural pressure points, but they also reflect the added cost when opt-out occurs. As states opt-out, they disrupt the degree of scale that makes FirstNet’s business case work,” Rehbehn said via email. “Penalty fees, on the other hand, may be harder to defend. What is the cost to build out a state when there is no transparency on the real costs? AT&T adding Band 14 to a subset of its existing sites is a lower cost burden than a greenfield Band 14 build across 100% of the coverage area. And if the state falters part way through a build, does it have to pay twice for areas that were built? It is understandable that state's chafe at these demands.”
The U.S. House Subcommittee on Communications and Technology’s hearing is scheduled for Wednesday.