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AT&T, FirstNet officials provide new perspectives on governors’ ‘opt-out’ decision process

Urgent Communications
By Donny Jackson

April 5, 2017

AT&T and FirstNet officials last week provided new details about information that governors should consider when deciding whether their states and territories should accept the FirstNet deployment plan or choose to pursue the “opt-out” alternative.

Under the law that established FirstNet, governors have 90 days after the FirstNet state plan is presented—the target date for state-plan delivery is during the latter part of September—to make a decision. Accepting the FirstNet state plans means that FirstNet would build the radio access network (RAN), assume operation of the network and deploy network upgrades as technology evolves over the 25-year contract period. An “opt-out” state would have to build and operate the RAN within its borders, as well as fund all future network upgrades during the next 25 years.

“There are the reasons to opt in and the reasons you don’t want to opt out,” Chris Sambar, AT&T’s senior vice president for FirstNet, said during an interview with IWCE’s Urgent Communications.

Heading the reasons that a state should accept the state deployment plan submitted by FirstNet and AT&T is the fact that AT&T is a nationwide provider today and expects “to continue to augment that coverage” in the future, Sambar said.

In addition, there will be important functionality differences between the FirstNet offering and a typical commercial wireless broadband service, Sambar said.

“There’s an application ecosystem, [and] you need to be on FirstNet to get the application ecosystem,” Sambar said. “Those are secure applications riding on a secure core network—AT&T’s network—a secure radio access network, and that’s specifically for FirstNet customers.

“Another reason they’re going to want to be part of this nationwide network: interoperability. If a state opts out and goes with another carrier—or they try to build it themselves—they have to be interoperable with the nationwide network. That’s not easy. So, they’ve got to figure out how to do that with the nationwide awardee, AT&T. That’s going to be a challenge for them.”

Indeed, interoperability and capability testing will be conducted in the FirstNet laboratories at no additional cost to states that accept the FirstNet state plan, according to FirstNet CTO Jeff Bratcher. However, each opt-out state would have to fund its own testing programs—approved by FirstNet—because the work will not be done in the FirstNet lab, according to Bratcher.

Offering another perspective on the matter, Sambar noted several reasons why governors should not pursue the “opt-out” alternative, which would require a state to assume a lot of additional work, responsibility and financial risk during the next quarter century.

“If a state opts out, they are signing up for a 25-year management of a vendor or themselves. They’re going to have to set up a program office, they’re going to have to manage that vendor for 25 years, they’re going to have to ensure that that vendor complies with all of the security, retainability, reliability, rural coverage, suburban coverage—everything that’s in the national award, that vendor is going to have to comply with, and the state’s going to have to make sure that they do it.

“They’re going to need an NTIA grant, so they’re going to have to apply for that—an unknown amount of money from the NTIA that they’ll get to build this thing.”

Indeed, an NTIA official said during an IWCE session last week that a construction grant from NTIA would cover only a fraction of the expected costs to build the RAN initially within a state. In fact, the formula for determining potential state grants would be based on a total of $5.5 billion for all four phases—construction, operation, maintenance and operation, according to Carolyn Dunn, director of NTIA’s state alternative plan program (SAPP).

This $5.5 billion figure will be divided by the 56 states and territories and only the construction portion would be considered for a grant. In addition, the state would have to fund fully all network upgrades—the timing of which would be dictated by FirstNet, not the state—in the future.

Sambar said he believes the choice for governors is clear.

“They can either pick someone who has an established track record and has been doing this for 140 years, or they can go with somebody else, hope they can build the network, hope they can get it up and running, and hope they can sustain it for 25 years without leaving the state in a lurch for finances,” Sambar said.

“So, there are lots of good reasons to opt in and lots of reasons not to opt out.”

FirstNet President TJ Kennedy said that FirstNet will work to ensure that governors have all of the information necessary to make the best possible choices for their states and territories.

“I would suspect that everyone really has to look at the risk and the reward and the timing of everything that needs to happen,” Kennedy said during an interview with IWCE’s Urgent Communications. “I think the most important thing is that I’m very confident that we’re going to be bringing forward very solid draft state plans and final state plans that are going to bring a differentiated public-safety service that should meet the needs.

“Now that we have an award, we can work very closely with states to get to those plans. I think that, when they look at the public-safety-grade services that will be offered on this network, it will be a differentiated offering that they will want to be on, it will be very cost competitive, and it will be available very, very quickly. I think that’s really key.”

At this point, five states—New Hampshire, Alabama, Arizona, Michigan and Colorado—have issued requests for proposals (RFPs) as part of efforts to provide their governors with an option or comparison point when FirstNet and AT&T deliver the deployment plans for their states in about six months.

During IWCE 2017 last week, representatives of these states and others noted the fact that the law creating FirstNet requires governors to make their opt-out decisions 90 days after receiving the FirstNet state plan, and—if pursuit of the “opt-out” alternative is chosen by the governor—180 days to complete the RFP process and present an alternative plan to the FCC for interoperability review.

None of the states have stated publicly any intention to pursue the “opt-out” alternative, but officials in these states have noted that the procurement process takes so long that it is impractical to complete an RFP process within the 180-day window provided by law. Given this, many of the states have started the RFP process early, with New Hampshire already selecting Rivada Networks as its vendor

FirstNet board member Kevin McGinnis said he understands the dilemma faced by state officials trying to preserve the opt-out option for their governors.

“Let me say something that may be sort of heresy—or would have been several months ago,” McGinnis said during IWCE’s final town-hall session last Thursday. “I think our response to the New Hampshires of the world that wanted to go out and develop RFIs or RFPs and develop an alternative plan was somehow anti-FirstNet or not good—it was a bad thing, it was a challenge. Now, it’s a new day with a newly changed situation. I think we’re all going to have to start looking at what that 90-day, 180-day limitation—which is in the law—says and how that’s going to impact states and their decision making.”

McGinnis said the cases made by representatives from states like New Hampshire and Alabama were compelling, based on the time limitations dictated in the law that established FirstNet.

“Their point is not to say, ‘We don’t want FirstNet,’” he said. “Their point is to say, ‘We need to do due diligence and have something to compare with whatever comes out of FirstNet.’ I don’t think that’s necessarily a bad thing. I think some states’ governors will insist on that. In some states where the governors don’t [insist on an RFP or RFI], others may question it. I guess my point is that starting to do your RFP work now or developing a plan now to compare with is not necessarily a stupid thing.

“What I can say from FirstNet’s point of view, though, is we will continue—through the state-plan development process—to be working with the same people who will be evaluating those plans and alternative plans. Hopefully, as Chief Johnson [FirstNet Vice Chairman Jeff Johnson] has said, by the time that plan lands on your desk—whether you have an alternative to that or not—it’s your plan as much as it is FirstNet’s plan, and there shouldn’t be any big surprises in it.”

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