FirstNet - Like curing world hunger is it too lofty a goal?

FirstNet - Like curing world wide hunger everyone wants it but is it too lofty a goal?

Let me start by saying a lot of writing about FirstNet is from either vendors, consultants or public safety stakeholders who have "skin in the game."  It makes a lot of the commentary biased.  I however do not have a stake in the funding of FirstNet, I do however see huge benefits in a broadband public safety network.  In following this exciting initiative, every month that passes with little to no concrete progress (increasing expenses on staffing, office, meetings and reports is not progress in my opinion) on this lofty goal just hardens my skepticism the federal government can pull this off.

Let me start by stating my predictions:

1. Will the federal government build out a broadband network for public safety eventually?  My prediction, no, but not for lack of spending.
2. Will the $7b U.S. from the auction of spectrum be spent?  Yes, just maybe not how everyone envisions.
3. Will the politics of Washington, large vendors and public safety stakeholders help in FirstNet's demise?  No.  Demise might be harsh but morph into a much smaller entity charged to dole out federal funds / grants to sub contracting carriers / sub-contractors and manage a bidding process.

What's in it for vendors?

There is the 1,000 pound gorilla in public safety communication, Motorola (and other well funded giants of industry).  What will FirstNet bring to them?  Bottom line no matter how you slice it, less money, a lot less in equipment and infrastructure sales.  "But they could help us build it," you say?  Why would they?  Currently Motorola sells multimillion dollar infrastructure and radios to law enforcement, fire and EMS to cities, towns, counties and states.  Some of the high end radios themselves are $5,000.  Why in the world (forget about what they may say publicly) would they advocate a network across the country run by the federal government to basically eliminate their multi-billion dollar business selling to over 55,000 agencies?  Ok so let's say that FirstNet picks Motorola to build FirstNet infrastructure.  Before they had 55,000+ public safety agencies they sold to, now it's going to one, the federal government with the hopes of picking the lowest bidder?  Let's get realistic Motorola will be the most adamant opposition behind the scenes not to mention carriers (we will cover them later) to add a government funded competitor to control 80% of their most lucrative public safety customer base and spectrum?  Look up Motorola's financials they are public look how much the public safety radio division represents in revenues?  Really just give that to the Federal Gov’t?

Ok before you gaggle of lobbyists, consultants and vendors slam me, I understand FirstNet starts out as a broadband data service only.  If we really believe agencies will pay FirstNet fees then buy another network for voice we are kidding ourselves.  Most of the new radio voice systems today are based on RoIP or VoIP so the broadband network most definitely will be used for two way voice communications eventually and has to, to be financially viable.

Now let's looks at carriers who have invested billions of dollars in a network to provide broadband services across the country.  The majority of law enforcement agencies have broadband connectivity to their cars today.  Most are using the same methods the public does, LTE broadband services via a USB device or WiFi hotspot or built into the ruggedized laptops installed in their vehicles. These agencies are paying roughly $35 per month (for in most cases unlimited data service) and it's working. Is it perfect?  No.  It works today and any estimates of what FirstNet will have to charge are at minimum quadruple this charge per month, not to mention the devices that will have to be purchased to work in this frequency spectrum. 

The only group I can see making money from this initially is consultants.  FirstNet dictates that every state have a detailed plan on rolling out FirstNet either themselves or allowing the federal government to do it for them (more on how well this is received behind the scenes later).  Many engineering firms will charge significant amount to put together a technically sound architecture, recommended governance structure and plan and will charge a lot for it, only to never see it executed, other than leverage to force FirstNet to send money to State government.

Let me cut to the chase, I have not seen a single state that currently is prepared to give this to FirstNet, most are lobbying and jockeying for position expecting “sugar daddy” federal treasury will give them an outsized portion of the $7b so they can do what they want in the name of building a Regional Area Network (RAN).  I know, this sounds pessimistic, but someone has to say it before we waste more time and money.  The rules for approving a RAN are not even written, all that is stated is that the FCC must have numerous hearings and the the NTIA then has to certify a State network, again without any criteria defined.  Currently no state even knows what it will cost them to be a partner and FirstNet cannot give them an estimate either, so why would any agree?  So the meetings continue, FirstNet expenses grow, and the smiling and handshaking continues without any measurable progress.  Local and State public safety officials however do get to attend some oversized meetings in their class one dress uniforms to stress how important broadband will be for the future first responder.

Public Consultation

I know the "law" states there must be public consultation, which by the way, is another method for consultants to bill time.  This, I hate to be sarcastic, is a joke.  I have attended a few of these state consultations.  Let me compare.  It is like rounding up everyone who has DirectTV service (and I mean everyone) and asking their input on building a new satellite to be launched into space to offer a new television service and asking input from every user on; Should the satellite be located in GEO synchronis orbit?  Low earth originating (LEO) based?  What downlink frequencies should we use?  How should we power the bird?  Who should launch the satellite the Russians?  SpaceX?  NASA?  Should it be a manned launch or unmanned?  What name should we give the satellite?  Who should build it?

Bottom line is the thousands of stakeholders at each state and local government, have the best intentions and see the benefit of a broadband network but do they truly understand anything about how to build a nationwide mission critical broadband network?  No!  What they do understand is getting information to first responders quickly to better serve the public. Just like the DirectTV customer knows where to find the college football game and channel on Saturday and know the difference between high definition and regular channels.

This network needs to be designed by network experts.  Sorry rural police chief of a city with 25 officers, this is not your core skill set setting technologies, engineering specs, or pricing for that matter, and while I'm making you mad, you shouldn't be on a committee to "help" design it.  Once its built and there is a user group committee making recommendations to improve it, yes, very much so.  You are a valued prospective customer of this network one day but have no place in designing, building or pricing it.  I know no-one likes the hear this that wears the uniform (which includes me).  Just like the avid college football fan is a prospect for DirectTV if they don't have the best picture quality, reliability and the games you want to watch, at an affordable price you will not subscribe or go to a competitor.  Same goes for FirstNet, even if no-one has the guts to tell you.

Pricing?

This is the big unknown, no one at this point can tell a local agency what the service will cost a month.  Now FirstNet has b even very good at explaining it "must be a self sufficient financial model" which mean they are going to charge you for this service, even if public safety feels the federal government should give it out for free.

FirstNet has no forecast on what it will cost per broadband device at this point in the process, and I understand they are still deciding on infrastructure equipment, vendors, etc.  Let me make an estimate, and its just that an estimate, my suggestion if FirstNet procured portions of their own infrastructure and partnered with some carriers and some states for some regional area networks (RANs) once the capital is spent and not taking into account the cost of having to pay back $7b in capital for this estimate I am treating the $7b as a gift.  In other estimates of public broadband expenses (not capital to build it), if 80% of the agencies in the U.S. signed up for service for their agencies broadband needs.  The per device pricing I estimate will be $135 to $295 per month per device for unlimited broadband service.  The public carriers today have a much broader base of users to share network expenses and pay for the capital investment, this is why its significantly cheaper today.  For FirstNet to be financially viable (they keep stating this in all their recent materials) they will either need to sell / lease the spectrum to public carriers or contract with these same carriers to provision the service.  No other financial model passes the “smell test.”  No matter how much we would like a private, nation wide network for public safety only, it will be too cost prohibitive, except for the top 10 metropolitan areas in the United States.

Do we really think a public safety official is going to pay this when nationwide carrier offer the same service for $35 per month (which chances are over time will come down a bit) and throw in a free devices when you sign a contract?  “But, but, but these carriers won't work in a disaster and FirstNet will!”  Really, do you really think during a mass tragedy this federal government network will survive a tornado, hacker attack, mass data congestion, etc?  I do agree it will have less congestion of data traffic but the cost to build a network to survive these kinds of disasters will be out of reach of everyone's budget and we will have to rely on public carriers as we do today.  Personally I have more confidence in the public carriers to keep a network up during a disaster than a federal government agency, but maybe I am too cynical?  Hopefully through this process and the transfer of federal monies these network operators will give public safety priority (which is supposed to already be in place today).

My Prediction

I probably should have started with this.  These endless meetings will continue for a couple years with no measurable progress other than a lot of expenses.  With an upcoming administration change, eventually everyone will look at the lack of progress, shuffle responsibilities within the Department of Commerce and NTIA in particular and eventually offer up an RFP for a nationwide carrier to bid on; to lease this lucrative spectrum and in return provide a discounted service for public safety with priority access.  If I was a betting man, I would think one of the smaller nationwide carriers like Sprint or T-Mobile might see this as a profitable way to snatch up lucrative spectrum and leverage their existing infrastructure in towers, network, and staff.  They will also be excited to sell a new service to new customer base.

I believe in broadband and getting as much of it for first responders as possible, so the mission has not changed, just who is best to deliver it and my conclusion is it is not a government entity.  I also feel it is financially unrealistic to think anyone can build a new nationwide broadband network for a single purpose.

Gotta run, someone is “two-waying” me on my Nextel … oh wait the federal government reallocated these frequencies.