Month: November 2013

FirstNet Funding Issues? Who would have thought? New Mexico and Ohio are not apples-to-apples!

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Now all of a sudden who is going to pay for FirstNet starts to be discussed…. about time. As I stated in my first blog entries, as well as my RFI responses to FirstNet, now I can actually say, “I told you so”. 
Listening to the House Energy and Commerce Hearing Senate yesterday (I said Senate but meant House Energy and Commerce hearing) the main consensus of the panel was about who is going to fund it: both the capital for deployment as well as its long-term operations and maintenance. As I said in the beginning, there is only one way to fund this big build-out — through Private Equity investment and the monetization of the spectrum under a Public Private Partnership that is controlled at the State level. Essentially, allowing the State to create its own broadband company to run its portion of FirstNet.
It was getting lonely on this bandwagon, but now it seems we have people jumping aboard, so it won’t be so lonely after all.
In listening to the statements in yesterdays hearing it is necessary to point out that New Mexico and Ohio are not apples-to-apples. New Mexico is using its portion of the BTOP funding, which has nothing to do with the $7 Billion, and is only deploying LTE of 6-10 towers along the border, essentially a pilot. Their initial program doesn’t even come close to addressing the $200 Million required to build just the estimated 639 towers, for just the RAN portion of the deployment, of which will be required to cover the State, let alone the long-term operations and maintenance. New Mexico still has to ask itself, “Where it will get that money when it wants to deploy statewide?” This will put New Mexico into the same conundrum as the rest of the States – like Ohio. When all said-and-done, New Mexico will be looking at a 500-700 Million dollar, all-inclusive, network…. mark my words. Just to compare, for Ohio’s RAN alone we are looking at $550 Million and 1600 towers, doesn’t include Data Center, NOC Operations, Billing Platforms, or maintenance and upgrades..
Ohio is already rationalizing its statewide deployment, which has nothing to do with BTOP, and it is the right course they need to take. Stu Davis is asking the right questions, and soon New Mexico will have to start asking the same questions. In short, New Mexico seems to be hoping for the federal agencies to come in and build their statewide solution, which may happen for the border area, but will they want to pay for the mountains of northern New Mexico as well? Unless altered agendas are at play, which usually means politics, and which I tend to stay away from — I just say it like I see it.
It’s nice to hear Bill Schrier, up in Washington State, starting to evangelize that utilization of all the states entities and agencies need to be considered as users to make the revenue happen. As I stated from the beginning, it is essential that all the State’s entities and agencies within the State be allowed to access the network under a paid plan. But, it needs to go a step further.
Being that everyone is starting to see that the revenue will drive the implementation of the entire network, but most importantly, the State’s network, the next step will be the realization of alternative revenue sources. We can make the case for Private Equity to invest in a statewide capital program, and the long-term O&M of the network solution, just by looking at the initial users, but there is more revenue to be had. If I told you what they were then I wouldn’t be able to feed my family. Let’s just say there is a lot of revenue in that spectrum…. the carriers know it as well. But, why would a 25-year veteran of the telecom industry know anything about that.

Just some guy and a blog….

FirstNet and the State’s – The twist and turns…well actually not….we’re still at the starting line!

/ drmikemyers / Leave a comment
This is what happens when you don’t have anything to do during the day…you put out a lot of blog entries. 
FirstNet has been preaching about the need for a “one-network” solution to be deployed nationwide, after seeing the governments ability to put up a website, how many of us want to put a highly complex broadband network in the hands of the same people? This doesn’t mean that Bill D’Agostino, or his staff, aren’t capable of doing what is needed. What I’m  saying is that maybe a business philosophy, of executing one of the most complex broadband networks in the world, shouldn’t be under the planning of the Federal Government. I think Mr D’Agostino is well suited to lead such an effort to build this network, but from a private standpoint! Otherwise, we have too many Chief’s in the Fire (no pun intended to our Public Safety guys). I don’t think anybody would want to see a rollout of a network that is suppose to be interoperable, integrated, funded and self-sustaining, only wind up being another nationwide rollout of LMR…or worse a healthcare website.
The beauty of the Public Private Partnership, with Private Equity awardees, even the network operations, planning, and oversight of the national network can be paid for, with a little more involvement from the Feds than a State needs, and executed for FirstNet itself. Such a P3 would be slightly different than a State P3. It will become evident that monetization of the spectrum will produce more revenue, still controlled by the State, in partnership with a Private Equity awarded team.  Remember, the Private Equity Team that wants to invest and respond to a State’s RFP, will team with a general contractor that will bring in design solutions through vendor relationships, much like any typical network is built and deployed today, only in this case the Private Equity investment is primarily there to fund the entire statewide implementation, management and operation of the State’s P3 SPV (Special Purpose Vehicle) and PSBN solution….still under majority ownership of the State. In short, a new broadband company for the State; under control of the State; limited to Public Safety as the primary means of operations; and designed and built to the standards of FirstNet. 
After all, we know that $7 Billion isn’t enough to build the nationwide network anyway. Why not limit the use of those funds to the FirstNet organization itself in order to incite private equity involvement at the federal level — such funding can be limited to the overall Public Safety national footprint by focusing on national data centers, NOC centers, cloud based services and governance oversight. Leave the State to build their own P3 solution. FirstNet can then coordinate the interoperability of each State’s network into the “one-network” scenario. The notion of a “one-network” solution, nationwide, is fiction at its best anyway.  
In the end, there is no better model, nor better solution, than the P3 I have been advocating about — especially when it comes to balancing the business needs of all those involved. We need to come to the realization that trying to grab for the whole enchilada will not work. We need to focus on each part and then focus on getting them integrated. Look at it from a very basic stand-point: have you ever played 52 card pickup? When you started to pick them up, did you grab for all of them at the same time? We need to be realistic in our approach to building this public safety network. But, then again….
I’m just some guy and a blog….

BayRICS, Motorola and Firstnet – the deal isn’t quite dead yet but it should be!

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Why would BayRICS fail out of the gate? It all comes down to understanding that an OEM is in the business of selling equipment, and that is where their allegiance will be when times get tough…as is always the case. The fact of the matter is you can’t mix oil and water….you can make it look as though they are mixed, but, in the end it will always go back to its original form.

I am referring to a recent article Urgent communications entitled, “BayRICS, Motorola Solutions fail to reach deal with FirstNet“. To summarize, when you have an OEM as your main partner, and you focus on the technicality of that OEMs solution for deployment, i.e. “push-to-talk”, plus the contractual obligations of that OEM living up to the full life-cycle of the project, you will ultimately have issues. Why? Because the OEM runs on a different business model. The OEM is not a long term managed service contractor, nor a good private equity player….they sell equipment, thus the acronym OEM (Original Equipment Manufacturer). It’s hard enough to convince your shareholders about your business execution on the products produced, let alone trying to convince them that you should be an operator as well. The only way BayRICS will be successful in the long-run, is by partnering with someone who doesn’t sell a product (box or piece of equipment). You need a partner who will have the same aspirations of designing, deploying and maintaining that solution as you do. In short, you need create your own company that is driven towards servicing its broadband users. The OEM would love to eat its cake too, but in reality all it does is create indigestion. I know this sounds very similar to a carrier, but a carrier is purely focused on selling subscriber based services for a profit, and just like the OEM that is where their allegiance will lie as well. As I stated, they too have investors to please, and those investors are expecting payback on a business model that was sold to them, most likely that business model did not say anything about shrinking their existing ROI.

You can’t call the OEM greedy, they are doing what they’ve always done….sell equipment and make money. What you can say though, is that your management team, who is creating your solution with the OEM, either, may not have your best interest at heart, or, they are demonstrating signs of incompetence. You can keep the focus on the belief that an OEM is your best solution, but, you have to remember, when the house of cards starts to fall…you are the ones that need to take responsibility for your own failings. As we all know though, by the time such a solution starts to show any signs of default, those responsible for getting it off the ground, and approved, will most likely be long gone. Hire a consultant who is entrepreneurial and wants to create a new broadband company, not someone that just wants to do what’s best for himself based on a monetary relationship with an equipment provider.

San Francisco, and LA, both have plenty of potential users, it’s hard to understand why they don’t take advantage of that. For a telecom guy with 25 years, it’s plain as day to me on what needs to happen, but, as I stated in the past, you can lead a horse to water, but you can’t make him drink.

Just some guy and a blog….

FirstNet and Public Safety Broadband: The threat of Connect America taking Public Safety Broadband customers… case discussion LA-RICS.

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In this corner we have Connect America with “some” Federal support. In the other corner we have Public Safety Broadband with “some” Federal support. And the fight begins!
Both fighters have been circling each other for some months now, Connect America has some experience behind him and knowledge of what works and what doesn’t work. PSBN is the young and up-and-coming new guy, with very little experience, but has a goal of becoming the best. Which one wins? As with any large-scale telecom deployment, it always comes down to whoever has the better business model and can sustain operations over the long run. Just ask the carriers!
Using LA-RICS as a case analysis (lessons learned or learning): for LA-RICS it will be a hard sell, in that management is only focused on the technicality of the Public Safety element within the arrangement, and, has been heavily reliant upon the Feds to help fund them. The primary issue here is the lack of long-term support, plus the shortage of cash up front.  The authority relies upon the bonds to be sold, out of the taxpayers pockets, and propped up with some promised funds of BTOP grants (and other smaller grants), but how do you sustain the model long-term? Well, that means you have to garner more public support in hopes of taxing them some more, plus hope the Feds will continue to support you through grants and subsistence — essentially LA-RICS is on food stamps.
Just my opinion, but the State is already deep in debt as it is, and is overly reliant upon the Federal Government already, so what’s different? The big difference will be if the State faults on it’s own debt then the Public Safety and First Responders will be left to their own means with no financial support. Or, worse yet, a huge natural disaster occurs and you are already stretched thin as it is, what good is the network if you can’t keep it upgraded, or maintained to a sufficient standard? Of all the places in the United States, we pick LA, which has the highest possibility of a large-scale disaster!
It is always easy to tell ourselves, “We are building this for the safety of the public.  Being that LA is most prone to disaster, makes it a perfect candidate to build it first!” Is it true though? If you don’t build the solution on a stable financial footing, you will only face hardship and detrimental progress towards achieving your goal, especially when no one wants to play in the mess you’ve created, after all, there are, or will be, plenty of other opportunities to go after instead.  
Now comes “Connect America” it has the same goals as the Public Safety Broadband, minus the “First Responder” piece. Every citizen everyday relies upon their cell phones to keep on top of emergencies — their landlines are going the way of DVDs. Connect America plans to build out broadband to every American in the United States, what they are searching for now is a business model that will make the goal achievable. The LA-City Council is going to build out its own broadband solution to all the citizens of LA with fiber and wireless access. The fiber is a given, but will be really expensive due to the impact on breaking ground and cutting up pavement throughout the city…. traffic is already bad enough. Wireless is the way to go.
For any telecommunications consultant, or city manager, they already know that LTE broadband is what should be installed; after all, how many people with WiMax phones do you see walking around today? Plus, a lot of business, social and tourist come to LA, how else would you accommodate their devices brought in from another network? The going statistic now days is that LTE covers 99% of all commercial carriers, and that 1% of holdouts, they have already committed to LTE as well. You’re not going to force your customers to go buy WiMax handsets are you? The importance of the network is to grant access, not limit it. .
So, if LTE is the technology, then all you need is spectrum to operate on. For PSBN they have the D-Block. For Connect America they have bands already running broadband services, which means Managed Virtual Networks through carrier partnerships makes sense, all they need to do from there is get a model that builds out the rural areas.
Out of the gate Connect America is already all-inclusive of users, there is no limit on who can be a part of the network, which means, they can generate a lot more revenue than PSBN. As you see in the LA City Councils move they are enveloping Water and Utilities as long-term clients. If the Utilities are already getting broadband service through a deal with aspirations of broadband to everyone, what main clients are available for PSBN? None, actually! This is where connecting America gets interesting.
Without those stalwart clients on the PSBN architecture the State will lose it’s ability for long-term operations and maintenance, because they will have no long-term recurring revenue coming in to pay for it. That means the dependence on the taxpayers will continue. If you think a Board running a commercial enterprise is tough, try running it through a Legislature. 
What about the business strategy for Connect America? The important thing to note is that Connect America is no different than a commercial carrier, except a commercial carrier has already decided it is too costly to build out to the rural areas. This is where Connect America starts to become weak. You really need to think about your user model and how revenue will be generated, after all, if the carriers found it cost prohibitive to build out to the rural areas, why would it be any different for yourself? By tying in the large players, like Utilities, you stand a very good chance of success, but you need to keep an eye on the commercial subscriber, and its frenzy, you don’t want it to take over your plans and wreck your overall strategy. That doesn’t mean you don’t use the subscriber model, it just means stay on point with your larger customers. Also, you need to watch out for the hardening standards of your big clients, who will pay for those requriements?
The architecture, and the P3 model for PSBN, is best suited to be all-inclusive with all state “Public Safety Service Organizations” (mandated in the Jobs Creation Act), which includes all the Utilities. For LA-RICS, technically they are pursuing such clients, but its’ not on the front burner. Or, it may be just a case of being over committed to a goal that has been in place far to long that has pushed them beyond a point of no return. If they are concerned with the financial aspects of funding their solution, which has been evident, then you would think they would be very interested in who could help pay for the network and its long-term goals.
My professional opinion is that the management of LA-RICS, which you have to say is doing their very best, has been leading with technology since the beginning and have neglected a revenue scenario to help pay for it, after all, why contemplate revenue when the taxpayers and the Federal government keep giving you money to build it? Essentially they took their eye off the ball of creating a business case for a “private broadband company” that is in the business of providing broadband to Public Safety, yet controlled through majority ownership of the board, of which the State holds the majority share. I’m afraid they are on their way to not fulfilling their “self-sustainment” requirements laid out in the law. The only way to do that will be to gather as many customers as you can.
As my Grandmother used to tell me while I was searching for her freshly baked chocolate chip cookies, “you snooze you lose, buddy.”  
I don’t think that the entire State of California is thinking in this manner, which leads to even more confusion. When it comes to their statewide Public Safety Broadband Network, who is really in charge in California anyway? For a State the size that it is, you would think that it is quite important for such a network to be built and controlled, then again it’s always an experiment on the first, only in this case you risk losing a lot more. My suggestion would be to follow the direction of FirstNet and implement the Statewide Interoperability Executive Committee to run the show, led by a Statewide Interoperability Coordinator; else LA-RICS may become the thorn in the State’s middle toe.
My two cents; all States need to understand that the PSBN architecture is in fact a network that can generate a lot of cash; provide public safety; integrate all its public safety organizations; and eventually help monetize the structure of broadband service statewide so that it does not take more from the taxpayers, but instead adds to the revenue pool of the state. The only way to do that is by balancing the needs of all the potential users of the network through the Public Private Partnership model. If you don’t, you will lose your long-term support, ultimately leading to a few people getting some black eyes, and you will lose all your potential clients to help make your business case. I can help you get there, after all, if there is anyone else out there, that has dedicated themselves more to such endeavors; then we need to join forces.

Just some guy and a blog….

FirstNet and the NASCIO — as I said in the very beginning…it will all be on the State CIO, which it should.

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I was recently watching the NASCIO presentation on FirstNet from last month. You can take a look yourself by clicking on this link: NASCIO Presentation.
It was a very good and informative video, and Jeff Johnson is a great voice for FirstNet. I’m concerned though that we keep avoiding the question about funding the PSBN. If you are creating your own business plan, then, naturally, you don’t want to have anyone present a competing model. The only way to keep this from happening is by keeping everyone in the dark and not telling anyone about your plan as it is being created. But, the fact is it won’t matter, when the time comes for the Governor to take some action, the plans will be compared and the best model chosen. How much data and listening do we actually need in order to kick this thing off? It’s only a telecom network, just because its going to be big, doesn’t mean it will execute any differently. We can sit around all day long talking about the “what-ifs” to the point that we are so educated on the topic we can’t move. FirstNet, needs to understand that the State’s need to do their own business plan. If a carrier solution is presented as the plan for FirstNet, they will lose a lot of credibility in executing this network. FirsNet needs to do both, have a plan of commercial service, but focus on the State’s business model first, then fill in the gaps with their carrier model if possible.  
Mr. Fletcher stated, “Why would a Governor not want a network that is ‘O’ cost?” If that is the case you only have two ways of paying for it: taxpayers, or private investments. Taxpayers would be both Federal tax base and State tax base; so saying you will get a network for free is far fetch, because we all will pay for it. The only way to get a “0” cost network is with a Public Private Partnership where Private Equity pays for it as an investment. The carriers can be considered private investment as well, but it shuts everyone else out, once again, the State doesn’t get the benefit of monetizing the spectrum themselves — you only get this through private investment.  Plus, who will pay long-term? If a State doesn’t do a Public Private Partnership it will be the taxpayers that’s who, plus, the State would not be able to benefit from the monetization of the spectrum. The only real way this network will be zero cost to the State, and the taxpayers, is through private investment, and you can only attract private investment if there is a means to get their investment back — plus some. The only model shown so far that accomplishes that is the P3 I have been profesizing about. 
The Tribal idea that Chief Johnson brought up is actually a P3! Only in this case the Tribes were willing to be the Private Equity piece. It’s a good idea, but it doesn’t contemplate that the State needs to benefit from the spectrum, how else will it get management for the long-term self-sustainment piece? Are the tribes going to pay to manage a network statewide? Why?
Ms. Decker, State CIO for Nebraska, brought up a good point – if the State’s don’t say anything, and FirstNet comes in to build it, how many of us believe that FirstNet will actually put a dime into it if there are no customers? Unless FirstNet is planning on a commercial carrier acquisition, merger, or partnership, then they will deploy on the carriers infrastructure, but it will only cover the metro environments. The metro environments already have coverage today; it’s the rural areas we need to be concerned about. Once again, the only way you can cover the rural areas is by balancing need, revenue and private investment. 
The focus on the State CIOs as the primary person for the State; the fact that construction has to happen at the State level no matter what; who the State will elect as users of the network, were all premonitions I made in the very first RFI response to the NTIA just as FirstNet was getting started. You can research my writings to see how, the things I warned about, are actually coming true — no, I’m not Nostradamus. I’m a guy that has been in the telecommunications business for a long time. But, we are moving in the right direction, it takes awhile for some people to understand the full process of building a network. It’s like me trying to teach you my entire 25+ years in building communication networks in three months…. it just won’t happen. Or like a Firefighter trying to teach me all about firefighting in three months…that definitely won’t happen.  It doesn’t help that they didn’t start with a business plan (or maybe they did 😉 ) but instead just came out with a vision of a carrier based solution to build the network, which totally set this whole thing off on the wrong foot… as I also professed. 
In the end though, sooner or later everyone will understand that the best model, by no means the perfect model, is the Public Private Partnership framework, but I’m ….
Just some guy and a blog….

Appointment of Boniface to FirstNet: What does Yoggi Berra, FirstNet and the Carriers have in common?

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U.S. Commerce Secretary Penny Pritzker appointed Barry Boniface to serve on the Board of the First Responder Network Authority (FirstNet) yesterday. That could be a good thing and a bad thing, but I’m betting on the latter.
This appointment could be a good thing in that we seem to be moving in the right direction when it comes to a business plan being finalized. But, most likely will mean a bad thing, in that his bioreflects a merger and acquisition background, which could relate to the possible acquisition, or merger, by FirstNet, with a major US carrier…maybe T-Mobile or Sprint? I refer you to his background “in a number of the largest merger and acquisition transactions in the telecom industry, including BellSouth/AT&T, Cingular/AT&T Wireless, CenturyLink/Qwest, Sprint/Clearwire, BellSouth LatAm/Telefonica, amongst others.” He could be a great asset in aligning what is needed and providing some insight to the GM though.
By merging with, or acquiring, a carrier it’s easy to see how many would think of this as a good thing, in that it assembles the perception that it could cover a lot of ground quickly – metro ground. But, in reality we would (I stress the point “we” as being us taxpayers) still be buying the same infrastructure that seems to go down every time an event happens. That would mean that all of the sites would still have to be upgraded and hardened to Public Safety standards…if we actually owned the entire site. Most of the carriers don’t own their own assets (reference AT&T selling their towers to Crown Castle), some share towers with other carriers all over the nation. In the end, you can put lipstick on a pig, but it doesn’t change the fact that it’s still a pig.
It’s also logical to point out that such an acquisition would still not hit the rural territories, and depending on who the carrier is, we may even risk our acquisition on the possible fact that the carrier, who is to be bought or merged with, was in itself a state “to be bought or merged with”, which would hint at some lack of business acumen or misfortune in the market place; this could also mean that their infrastructure does not even cover all of the metro environments that we are trying to hit.
Maybe it’s not about the communications? One of the biggest obstacles with deploying LTE is site acquisition. We could be buying a lot of property for the cause, that’s if the carrier owns his own towers — most don’t. If that were the case, why buy a carrier? Why not buy a tower owner, like Crown Castle or American Tower? If you want to buy land you don’t go and purchase a telephone. Plus, if you combine all the users of the PSBN network you will quickly find out that they own their own land already, in most cases they lease to the carriers themselves, so why do we need to add the carriers assets?
Then again this may be a white rabbit, in that FirstNet doesn’t actually intend to buy anyone…or merge, if that were the case. Could you imagine the chaos that would persist in trying to build a Public Safety network off infrastructure that was designed for commercial service? We would just be buying the rights to own the carriers headaches. The issue of backup power alone would increase sales of Tylenol across the Nation.
In the end, for seven years, I analyzed the merger and acquisition process of a major carrier to fulfill the needs a of vertical market player, but, what ends up happening is a chaotic relationship trying to mix business models. All the models I looked at died in the same manner of non-compliance and the lack of meaningful characteristics that could sustain the buyer’s needs resulting in wasted time, money and assets. The best way this network will work, is when everyone’s needs are met, and you can only meet everyone’s needs through a Public Private Partnership executed at the State level. I feel like I’m talking to the water in the well at this point.
As Yoggi Berra once said, “We made too many wrong mistakes.”

Just some guy and a blog….


PS… I still need a job.

Carriers to use FirstNet — but not the way you are thinking!

/ drmikemyers / Leave a comment

One of the inherent things about FirstNet, and the use of the 700 Mhz D-Block spectrum, is its ability to generate revenue. Just because we are building a completely hardened Public Safety network, that will prioritize our First Responders during a disaster, we mustn’t shy away from the fact that the spectrum, if modeled right, can generate enough cash, not only build it, but self-sustain it for the long haul as well. What it requires, and don’t think of me as being to cliche, is some thinking outside of the box….outside of “the way we are used to building things around here”.

Of course the network will be built for Public Safety, but, with such a resilient and hardened infrastructure, it will become advantageous for even the commercial carriers to consider its use. As a paid user, they can shed and sell-off their own assets and put the burden on the new owner — isn’t that the same as selling their assets to players like Crown Castle? As we start to build this network, it may come to fruition that even the carriers decide to sell their spectrum to FirstNet, instead of the other way around. After all, why build my own infrastructure when I could just use infrastructure that will cover every square meter of the Nation and our Territories? It gets rid of a big problem I have with penetrating the rural areas!

Why do I need to spend money on infrastructure at all? When my requirements call for 8-hour backup generation (usually the most costly item of any cellular buildout) and the hardened network of FirstNet will be based on 36-hours, and paid by someone else, why don’t I just pay to use their network? Why don’t I just sell FirstNet chunks of my spectrum being that I don’t have to invest in the assets anymore? Settles another problem I have, that is, my shift away from owning the infrastructure and focusing more on broadband services! All I need to do is sit and wait, and slowly start to divest my own assets in the metropolitan areas, while I shift onto the FirstNet architecture as a paid client. Shifting over to an infrastructure that is managed by the government would definitely cut my own costs as a carrier, as well as the risk. People won’t complain to me anymore when a disaster happens…they will have to focus on the owners of the infrastructure…that being the States and FirstNet. Another key item is that I could still use my own spectrum, but install my gear on FirstNet sites, so I don’t interrupt any prioritization schemes.

And, probably the most important thing it does for me, it improves my bottom line, where I can cut overhead in managing all that infrastructure and focus more on just selling higher margin services!

Who would have thought?

Just some guy and a blog….