The key to a successful Public Private Partnership in the Public Safety Broadband Network is a balance between business objectives, needs, technology capabilities and its inherent ability to attract and create cash. These are all elements that the FirstNet Board must consider when rolling out the new network.

Physical Execution of a nationwide broadband network that is targeting 99% geographic landmass of the United States, and its outlying territories, will ride on the successful implementation of a sound Public Private Partnership strategy that starts at the top, yet flexible enough to attract and maintain core aspects of its solution.

The essential elements of a successful P3 for the Pubic Safety Broadband Network will be:

What exactly is a client? As it pertains to the PSBN (Public Safety Broadband Network) those clients are the internal agencies and entities that have responsibilities during a crisis; such responsibilities must be focused on Public Safety or National Security.

How do you shape such “clients” into a paying client? It’s simple; these clients would require broadband service even if the PSBN did not exists (which it doesn’t today). Most State and Federal Agencies have characteristics of Public Safety Services that are inherent as part of their internal business plans, i.e. Fire has the business plan of fighting fires; Police has the business plan of protecting and serving the citizens; Utilities has the business plan of safely distributing power to the nation, etc.., all of them require broadband services to help fulfill their goals and thus create huge capital budgets to make it happen. If it were me and I had to commit to a 500 million dollar capital budget for the next three years to build out my own communication needs why wouldn’t I prefer to pay a fraction of that and pass the risk onto a State P3 whose primarily goal is to insure I get the same services? 

What would it cost for a client if it had to design, build and pay for their own private broadband solution? The issue today is the lack of spectrum. Without spectrum you can’t build a private LTE network. If you don’t have spectrum you have to get it from somewhere else. You either get the service from a commercial enterprise, or a private entity, but you must also fit your needs with the service you require, i.e. if you require 24 hour power backup generation then that needs to be part of your service agreement from whomever you get the service — with those requirements comes the costs. It’s a common estimate that 60-80% of all the costs associated with major telecommunication builds have to do with the services (not the technology) such things as the cost of construction cost of management cost of design and cost of execution. Less than 15% is usually related to materials (cost and materials contract) and of that 15% less than 7% actually has to do with the broadband technology itself…to include microwave for backhaul, eNodeB’s and even switches.

But why do we need LTE at all? The main reason we need to have LTE has really nothing to do with the technical requirements, but rather an alignment of business objectives and the wave of the commercialization of broadband services. In short, looking 10-15 years down the road a majority of all communication services will be wireless. That wireless will be LTE…but why? Why because that is where the large consumer market is establishing the dominant amount of research, development and market objectives. If you are to deploy a commercially available off the shelf technology, i.e. 4G broadband services, then you need to align your overall business plan with that of the market. If you don’t you risk a great deal.

As with any good Public Private Partnership is a strong “private” piece. In order to attract the “private” investors there has to be an attractive return on investment. It’s quite simple: if you are to invest some of your hard earned cash — what will you get in return?

How do we create a return off a fixed Public Safety Broadband Network? There has been many within the Public Safety community that have searched for this answer from the best source they know…the commercial carriers. But, this is not a good source of the answers. It’s not just about the money that needs to attract the investors; you need to have a solid alignment of business objectives. Without a solid alignment of business objectives (business cases) you risk one of the parties becoming dominate over the other, which will create consternation and resentment ultimately leading to bad politics and eventually a declared failure in the overall project objectives. The solution is to look within and to create a new business objective with your own aligned partners who have similar requirements. The common variable in this instance is the “Public Safety Service” component. By aligning on this variable you will find your partners. With those partners you can objectively seek out a standard fixed set of requirements that will ultimately establish a payment mechanism for a fixed recurring revenue steam…as well as a design. The best tool for making this happen is the Public Private Partnership.

What other sources of stability can be found for the investors? One of the leading reasons we, in the United States, have never had a Public Private Partnership deliver a large telecommunication program is because telecommunication services generate a lot of cash. With the amount of cash that can be generated the private commercial side never saw the need to establish a Public-Private Partnership. They were willing to spend the cash to build it themselves as long as there was paying clients — then why share in the profits. Technically there is no difference in the PSBN…. but the alignment of business objectives are quite different. The objective of a private PSBN is more about the fixed network solution that will render aid during emergency service situations — the heart of its business case. A commercial service provider is all about subscribers that bring in revenue that creates profit that pleases its investors. If a commercial business cannot create a profit from the business it is in, then it won’t be in that business anymore.  The beauty of this relationship though is the longevity of the recurring service requirements from the Public Safety community.

The Public Safety community, in this case market, is not a typical subscriber, or service level contract. A police force or Mass transit Operator just can’t cut off its broadband service because it found a cheaper cell phone, more features or a lower payment. The clients require long-term investment, strategy and infrastructure assurance. Such requirements is music to the ears of the private investor…long-term recurring revenue with a fixed hardened client that won’t change his mind every time a new technology bump happens. Management of this solution also presents some great opportunities.

One of the “big” industry terms these days is “Managed Services”. In the past the commercial carriers basically wanted to off-load the costly maintenance and management of its own telecom infrastructure and assets. To do so they relied heavily on their primary OEM (Original Equipment Manufacturer) to come in, with a fixed price, to manage their own gear. The only difficulty with this, and I won’t go into it here, but you must consider the overheads of the OEM before you ask them to manage their own gear…. they don’t come cheap. But for the PSBN this becomes more manageable.

The PSBN Managed Services opportunities are long-term and sustained…. but not positioned well for OEMs. The technology curve is too rampant to consider it viable. Remember the OEM business model is about selling gear, and primarily to whoever will buy it, they are not in the business (because they tend to be too expensive) of managing their solution for the long haul. But such an opportunity is prime for a P3 created Special Purpose Vehicle.

Through a P3 the State could setup a private entity whose sole purpose is to run the State PSBN and nothing else, thus creating a low overhead and high margin service based off the long-term service level agreements. In essence the P3 would create a Build, Own and Operate model of execution paid by private investment and pulling in long-term recurring revenue from fixed clientele. Notice there is no mention of “subscriber based billing”. That model just won’t work here.

Just some guy and a blog….

I was reading a recent article, titled, “Sarasota County Commission splits on public-safety radio initiative”, posted on September 13, 2012 by Rachel Brown Hackney. Even though the article may be talking about some type of an LMR or P25 network the article does manage to highlight a critical point that all States should start to be aware of; that is the difficulty in building the Nations Public Safety Broadband Network if you don’t create a business case first…especially when deploying the next generation of technology.

Essentially Chairwoman Christine Robinson and Commissioner Joe Barbetta voted against an RFP to bring on a consultant to start the process of analyzing the States Public Safety Broadband plan. One thing that sticks out is the amount of technical discussion clouding the necessity of the business case. What I mean is that I agree with both parties viewpoint about an RFP, but I think they are mixing apples with oranges.  Confused?

As written in Ms. Hackney’s article she stated that Robert Stuckey, Sarasota County’s General Manager of Public Safety Communications “made a presentation to the [Sarasota County] board about the type of equipment staff and public safety officials felt would work best for the future, Barbetta pointed out that Hillsborough and Pinellas counties had purchased about 2,000 radios of the type proposed”. Why do we need a consultant to help the State with this? Why are we already talking about purchasing? To this point I agree with Chairwoman Robinson and Commissioner Barbetta in that, at this time, we should not be concerned with painting the pants on the ants; nor what pants we purchased. This type of technical detail is what the interoperability board, under the NTIA, has already done for the State and, with a properly executed business case, will be covered when it comes to cost issues.

I also agree with Boards approval for an RFP, but not for what I interpret this scope is to cover. The county does need a consultant. But this consultant needs to come in to analyze its business case, thus their Public Private Partnership (P3), and its requirements to fund the build and to lay out a plan as to how each of the Counties inner agencies will interface, especially as it connects to State parent organizations. The RFP should dictate that the consultant would analyze all the available, and potential, “Public Safety Service” organizations and figure out how they can play together — both financially and technically. Such a consultant needs to understand the technology — to a point — but only so that it can administer the service level agreements that each of the State’s agencies will require when getting the broadband they need. The consultant should also be able to build a business case on how they will pay for such access and the administration of their agreements. Such a consultant essential needs to be fully educated in the execution of a Telecommunications Public Private Partnership and how the county will play a role in the overall State Public Safety Plan.

If the county does decide to move forward with an RFP it must demonstrate a desire for the county to sufficiently model a business case that can generate working capital to maintain the solution for long term…and in coordination with the State. I believe this is where the Board, Chairwoman Robinson and Commissioner Barbetta differ. The Board is actually asking for this, but haven’t the knowledge enough to express it. At the same time Chairman Robinson, and Commissioner Barbetta, are trying not to address technical requirements the county doesn’t need at this time.

What concerns me is that none of the discussion to date, even outside of this county board session, has expressed anything about the “States” requirement for a Public Private Partnerships, or how it plans to “self fund” (mandated in the legislation). If we don’t start discussing this topic, what is going on at this county session, will happen throughout their entire State. And if it starts to happen with this State, then what happens with all the other States? 

You should note, that I have personally been working on just such business cases and they are proving to be very valuable — not only administering all the needs of all the “Public Safety Service” agencies — but they also demonstrate a great amount of cost savings. In addition they are inherently designed to generate enough revenue that attracts private equity investors. In this case the State doesn’t even need to use taxpayer money to fund and maintain their solution. The private equity firms are willing to pay for it all as long as they can tap into the long-term, recurring, revenue from the fixed agencies that require the service. With enough knowledge of the technical capabilities of the broadband solution it is easy to create a viable solution for all parties.

With that said, I would highly recommend that the Sarasota County Commission advertise an RFP, but it should address the need for the consultant to analyze their business case (P3) requirements as it applies to the overall State requirement. Or, better yet, they could just advertise their RFP for a consultant, like me, to just come and explain it all. 

In conclusion, why am I writing about this? Because, what is being played out in the Sarasota County Commission sessions will happen all across the country. If we don’t set a standard of governance and execution from the top (FirstNet), then the entire solution will fall into a state of disrepair and ultimately a waste of money…taxpayer money. Most importantly, what is needed is a standard set by FirstNet for executing a solid roadmap of Public Private Partnerships.

Just some guy and a blog…

In reflection of 9-11 I wanted to share why I do what I do. A lot of people ask why I post to this blog and specifically to the tune of Public Safety. It’s simple, this is my way of supporting those that died during the attacks on the World Trade Center in New York, the Pentagon in Washington DC and Flight 93 in Shanksville, Pennsylvania.

I have spent more than 20 years in the telecommunications industry and 10 years prior in the Armed Forces. Had I not had a change of a meeting scheduled that day I’m convinced my Dad and I would have perished in Building 1 (North Tower). We had plans to eat breakfast that morning at the “Windows of the World” on top of Tower 1. Nobody above the 91^st floor survived. In tribute to what transpired I felt a need to dedicate myself, like many others, to finding a way to help our great Nation anyway I could. At that point in my life the only thing I had was my ability and passion for the telecommunications. Like many others I could not predict what path was set for me that day.

Following the disaster I was given the chance to take over an oversight role as Project Manager for MTA’s SONET ATM project assigned to Washington Group International (WGI). WGI’s main offices were located on the 91^stFloor of Tower 2 (South Tower).

WGI lost twelve souls that terrible day and a majority of them were on this project I just took over. It was an honor to be called upon and to do what I could to repair the damage and restore moral.

My Dad was the General Manager for the New York City Office for WGI and ran their operations from there. The change in my schedule saved his life as well by allowing him to divert his schedule to the Princeton Office that day. He, like myself, has a passion of riding his Harley, so when my schedule changed, it gave him a chance to ride to the Princeton Office instead. I remember the toll it took on my father having to go to all those funerals. I know he had to deal with some sort of posttraumatic stress that fostered an overwhelming amount of guilt whenever the topic came up. I know it shaped me forever as well.

In my effort to do something that could help our efforts, and to get back at those that perpetrated such evil acts, this PM job was a start. The scope of this job was to install the cities new fiber optic backbone that would eventually connect, not just the transit system itself, but also the cities First Responders. What better thing to do than to use all my experience and knowledge to help make this network a possibility…. so I began the process of “packing parachutes”. (Cpt. Charles Plumb, USN Ret and Viet Nam POW)

As the PM I was in constant meetings trying to provide insight and direction in getting the complex communications solution off the ground. This network was going to be the backbone for one of the most advanced communications solutions in Manhattan and in direct support of First Responders…. the same First Responders who lost 342 brothers and sisters in the terrorist attack. In fighting through all the chaos I found the entire process of building large-scale communications deficient in many ways. This gave me the idea to culminate all my experience into one thing I could do that would help the entire system. In 2003 I dedicated myself to a doctoral program addressing the topic of advancing telecommunications in a manner that can be successfully managed and deployed. I would go on to publish my dissertation in 2009 and was accepted into the academy of professionals as the sole expert on the topic of advancing telecommunications using Public Private Partnerships. Until someone expands on my topic I remain the expert to this day.

My experience gained from my work for the MTA became the case study to validate my assertions and theory.  With the passage of the Middle Class Tax Relief and Job Creation Act of 2012 (“Public Safety Spectrum Act” or “Act”), governing the deployment of a nationwide public safety broadband network in the 700 MHz band, became a validation to my theory. As part of this legislation it states the use of Public Private Partnerships (P3) as a necessary tool to help fund the deployment, and self-sustainment, of this great national asset. Given that there has never been a successful P3 for telecommunications in the United States lends credibility to my dissertation and, thus, personal satisfaction that I am contributing to something greater than myself. Even if not assigned to the very top, and leading the charge, at least I now know that my theory of Public Private Partnerships is taking hold and I must offer my expertise to those that are appointed…thus the term “packing parachutes”. I can help pack parachutes for those high-flying appointees hoping that if, and when, the time comes that parachute will save their lives. Now we just need to make it happen.

In going back to all those chaotic meetings at the MTA, I would have to recommend that clarity at the very top, and unwavering support from all the members of the FirstNet Board, will be essential to its success. So, in preparation, I submit myself to the cause of making this network a reality and I hope others will follow…in fact I know others do the same already. It’s time to start packing your own parachutes.

Just some guy and a blog…

One of the overarching discussions surrounding the Nations First Responder Public Safety Broadband Network, or Public Safety Broadband Network (PSBN), is the necessity to find the cash to build it. We can have all the discussions we want about the technical viability and interoperability of the solution, but without a driving business case to push those technical characteristics into an operational model that depicts a return on investment; it’s useless jargon, or a great way to create chaos.

Just recently I completed a business case for an electric provider that demonstrates why having a Public Private Partnership (P3) to power the financial planning of the PSBN is such a great idea. I would highly recommend others follow suit….that is using me to build their business case. In short, this electric cooperative covers about 3 counties, small in relative terms, but they too require the LTE broadband technology to replace its already end-of-life 3G deployment that supports its SMART Grid. To do so would cost this co-op about $30 Million dollars to build their own solution…if they could actually get the spectrum to build it on. To lease the service from a carrier is too costly and doesn’t meet the hardening requirements for such a tepid location.

In analyzing the situation this electrical provider would actually save about $3 Million a year, or roughly $250K a month, by leasing the broadband service from the PSBN. In return they have offsetting costs of roughly $2.4 Million annually by leasing back their own tower, fiber and backhaul assets to the PSBN footprint covering their area; which actually saves the State a tremendous amount of time, energy and costs.  This co-op is willing to relinquish the necessity of their own capital program to build a private LTE solution by paying a fixed annual payment of roughly $5.2 Million annually with 20-30 year terms to the PSBN P3 entity for the State (we used a 10% target of total capital costs). With an estimated cost of $31 Million, and a depreciation schedule of 6 years on the LTE solution, they would amortize their cost to a fixed $5.2 Million annual payment.  At six years the technology is risky, so the savings could actually be higher, just depends on what the schedule is for LTE advancements. This fixed annual payment is based on a Service Level Agreement (SLA) between the Co-op and the State P3 entity, which addresses their hardening requirements, as well as advanced placement of services. By aligning itself, this electric co-op opens the door to expanded service offerings as well.

To explain; it should be a given that the PSBN will be broken into, at least, three levels of priority; Level 1 is for Police, Fire, EMS types; Level 2 is for SMART Grids, highway ITS, rail communications, etc..; Level 3 would be for Rural Broadband coverage. In an incident the commander of a response scenario would free up available spectrum by prioritizing the level of communications for the given incident within a given geographical space. This means that if there isn’t an emergency response happening (which will be a lot of the time) then all the traffic is isolated back to its original paths. This opens another great opportunity that the electric co-op could benefit from — that being to utilize the Level 3 traffic to lend Internet access to its rural customers. By doing so this electric co-op could actually see an additional $500K a month it added services at $50 dollars a month access to charge with a penetration target of 75%. By outfitting its own business model this co-op would actually increase its costs savings, and the potential additional revenue, to almost $8.8 Million annually, or $733K monthly.  Not bad for not having to spend $31 Million to get it’s broadband.

This is just one small electric co-op business case; now imagine if a State has 36 such entities that all have “Public Safety Services” as part of their daily lives. I can easily make this same business case model for a major Class 1 Railway, High-speed Rail, Statewide Power Utility, or major Transportation Department running the highways and inter-modal port facilities. All of these entities have elements of “Public Safety Service” requirements that come into play when a major incident happens; and all have broadband technology demands to make the technical aspects of their business case successful. They also come with deep pockets and alternative funding sources that require them to build just such technological platforms into their own business model. This is the heart of “My Model” in executing a P3 that can, not only build, but also maintain the self-preservation for many years to come.

This co-op’s LTE needs, as I am discussing, would cost roughly $31 Million. Picture a power Utility that spends traditionally $1 Billion every three years for much more geographically disperse footprints…imagine what they would save. I can think of one major electrical provider who spent roughly $630 Million to build its SMART Metering infrastructure. Upon completion their major commercial broadband service provider informed them that the 3G services they just signed up for, to power their SMART Meters, would be moving to LTE. It may be just me, but deploying 3G cellular services to rollout a SMART Meter means that the SMART Meter itself has an internal 3G modem. Wouldn’t that modem have to be upgraded to LTE as well? Just a thought.

But imagine if that same Utility were to get their broadband service from a State P3 entity instead — an entity that builds its network just for Public Safety Services to which this Utility is part of…and meets its hardening requirements. Imagine if they, like the smaller co-op, were able to eliminate costs, by let’s say — $630 Million upgrade — by instituting a fixed annual payment of $63 Million for the service with 20-30 year terms. How much money do you think they would save? Let alone, what if this same Utility were able to sell Internet service to its customers much like the small co-op?  

Just theoretical, but what if they had 2.2 Million customers and targeted a 30% penetration rate for Internet Access at $50 a connection…now this is just me and remember I have a PhD in Business not math, but that would mean $33 Million a month in additional revenue.  At $33 Million a month, I may be mistaken, but that would pay back the original $630 Million in roughly 19 months. It would also eliminate the need for this Utility to fight with the State Legislators in asking for an additional $2 or $3 dollars to everyone’s bill just to try and build its SMART Metering Network in the first place. Sounds like a match made in heaven for this Utility provider and the PSBN.

But don’t forget the P3 created by the State, they too would benefit. The PSBN P3 entity would also see a $63 Million dollar annual payment for broadband service with a fixed contract for 30 years. That sounds pretty good to me. Combine that with all the State entities who could access the PSBN and I think we may have a great way to pay for the PSBN all together….and maintain it for a long, long time.

Just some guy and a blog….