I hear everyone talking about assets; assets this, assets that, we all like big assets we cannot lie. Or was that a song? It is easy to believe that existing assets are the way to go when considering the build for FirstNet. The reality of those assets being used is minimal. Allow me to explain…

There is more to the equation than just the technical aspect when considering a tower site. A typical cell site for a carrier is designed around 8-hour battery backup incase of outage, so all we need is to add more batteries or a diesel generator…right? Wrong, in actuality the main issues will not be the batteries, although is a pretty hefty cost item, the primary issue of FirstNet’s network will be security. Each site will require video and access controls; at least two orders of perimeter security; high mounting of equipment (best to be pole mounted); some cases floating platforms in flood plains; and redundant power sources. These are just a few. I think you get the message. I’m not even going into Cyber Security yet. 

Even if the cell site — owned by the carrier, tower company, or individual — has all the batteries, and meets all the hardening aspects, how do you cut the carrier, tower company, or owner, off from accessing the secure site, where as their own contractors need to be cleared before the can enter the site, let alone the communication HUT?  After all, in most cases we will be sharing those towers with multiple carriers. We can’t have some rouge contractor on the site implanting listening devices on the critical communication ingress and egress points. It’s bad enough the wireless signals have to be fully encrypted transmissions; we can’t take the risk on espionage, or sabotage, with someone accessing the site to penetrate within the perimeter of the communications topology…. let alone we haven’t even started talking about the centralized point of communications for the power grid. Anyone heard about the attacks on the electrical sub-stations in California? (Hackers want to exploit Power Grid) If anyone takes out the power grid, we’re all doomed. 

The fact of the matter is that even the very best existing tower asset realistically will not meet the standard, so we either save the money, time and heartache now and commit to a stand-alone, hardened, new tower site design, or we complicate it with a vetting process of thousands of existing assets when in the end they won’t meet standard anyway. Complicating the issue with existing assets is not going to help. That doesn’t mean we ignore those assets, it just means we have to take special care when considering them as viable assets for FirstNet. Just look at LA-RICS… there are plenty of commercial assets available, instead all the towers are new and placed on Police and Fire land. Which by the way, if the bid for LA-RICS was awarded at $179 Million, well then $179 Million / 232 towers = $770,000 a site. Just to put that into perspective, that’s 7 times the cost of a typical commercial cell-site. All the sites in LA were on Public Safety property and in a flat coverage zone of the LA basin. It doesn’t take a rocket scientist to understand what those numbers will look like in the rural mountains or forest covered settings of the United States. If the carriers can’t afford to build their own towers, at a $100K apiece, in the rural areas; why would we think FirstNet could do any better?

But then again I’m….

Just some guy and a blog….

The Middle Class Tax Relief and Jobs Creation Act of 2012 was signed by President Obama back in February of 2011. The Act allocates 20MHz of the D-Block spectrum to Public Safety. In short, all “Public Safety Services Organizations” will get an all-encompassing private broadband LTE network, using the exact same technology you see being deployed for AT&T, Verizon and all major carriers. That little “LTE” label on the top corner of your cell phone is the same technology Public Safety will get; but in this case their network will be private, 100% geographic coverage of the United States, plus our 6 Territories, and will be truly hardened to withstand natural disasters. Another important characteristic of this network will to classify the network traffic for pre-emptive and interruptible services during an emergency.

The network will be based on a simple solution of prioritization, where as, Priority 1 is dedicated to First Responders; Priority 2 will be dedicated to Public Safety Support Organizations, such as Utilities, Transportation, Agriculture and the likes; and finally, as depicted in the Act of 2012, the network will allow for Priority 3 services, where the underutilized, or unused, bandwidth can be allocated to commercial services, specifically in the rural areas. Why is Priority 3 Traffic a big deal? Well let me explain.

In the law it states that FirstNet cannot sell, or market, telecommunication services directly, but through the Public Private Partnership they can, most particularly through the private investment side of the Public Private Partnership, where as, they can lease services by bidding access to the rural, and metro, constituents via lease agreements with the actual market players, i.e. AT&T, Verizon, Google and/or NetFlix. Example would be a P3 in the State of Oklahoma where as all the commercial carriers, ISPs and cable companies can bid for access to the States residents through the Public Private Partnership that runs the States Public Safety Broadband Network. This enables productive revenue producing operations, plus opens the market to competitive bidding.   

The traffic traversing the network, as Priority 3 customers, will be bandwidth fillers while there are no emergencies going on in a given geographic area, especially in the rural parts of the nation. It is believed that only the carriers will bid on the commercial access to Priority 3 users, which is not true, access to the Priority 3 traffic could actually be a really good play for NetFlix, or Google, especially if they want to avoid charges from their competition, i.e. ComCast, Time Warner, AT&T Uverse and Verizon FiOS. Essentially, no network access is free, but all-inclusive broadband coverage through the PSBN architecture would be a great revenue source to help fund “self-sustainment” for Public Safety Broadband (also in the legislation). Is this a threat to commercial carriers? Well yes and no.

Access to Americans is being fought in the halls of the Legislature when it comes to Net Neutrality and Universal Access, but those notions have changed with the new FCC Chairman. But, is that a bad thing, or just an acknowledgement that past battles on Universal Access were old school and that a new paradigm is forming? With the aggregation of the Universal Service Fund, BTOP (Broadband Technology Opportunities Program) and the FirstNet funding, we are actually experiencing a convergence of the technology as it naturally gravitates towards an all IP data centric architecture model with centralized wireline fiber optic networks, wireless broadband solutions and pervasive connections to all Americans. Essentially, FirstNet is actually solving the great divide between owners of the broadband infrastructure and the actual streaming services, such as NetFlix.

FirstNet, or the Public Safety Broadband Network, is the first network to encompass all the characteristics of broadband infrastructure implementing under the social necessity, rather than revenue producing rates per user paradigms — essentially becoming the 5^th Utility for America.

I covered this in an earlier article where I raised the idea that FirstNet would in fact do just that – create an all-encompassing wireline and wireless broadband solution — much like we see for our water and power infrastructure in the United States. It becomes complimentary as the carriers continue their push away from owning the infrastructure and moving into content, i.e. streaming movies, music and data. Another aspect of this convergence is that the Priority 2 users are also driven towards wireless broadband with such programs as isolated, and secure, demands for transportation networks; power distribution upgrades called SMART Grid; and the coverage requirements for forest fires in the west. In short, the convergence into wireless broadband is driven by the market demands of the users, and in this case the users of the PSBN will also integrate the likes of NetFlix and Google. As we are already starting to see, the development of the Public Safety Broadband Network is actually creating the hardened infrastructure of universal access to all Americans.  I see this as a good thing. Nobody wants to own all the costly assets when it comes to commercial infrastructure, but everyone wants to gain from its inherent capabilities of perpetual broadband service.

In the end FirstNet is the seed for Universal Access where as the priorities of access are driven by need rather than revenue, essentially putting all the priority of open and preemptive access, controlled through one fixed wireline and wireless broadband solution that supports all Public Safety needs first. If a disaster happens the First Responders will have all the power to take the network over, which is not the case today. Today Public Safety would be trying to take over a commercial operation for its emergency needs impacting the commercial entities revenue source; let alone the fact that these networks are not hardened to meet Public Safety demands.  

FirstNet’s network is how the infrastructure of broadband technology should be designed, where as, we focus on the social need of Public Safety, yet still remain open to commercial capitalism. If I were a carrier, I would be pushing to invest in this strategy as fast as possible. The cost of managing your own infrastructure will continue to drive against margin all while the price of services continues to fall. You can’t get any better than letting a Public Private Partnership drive your ability to access all the rural geography of the US while not constructing a single tower out of your own money. As it is today the cost of the commercial infrastructure is already starting to outpace the revenue it produces. 

The Myers Model™ is the first model of Public Private Partnership that meets all the demands of the Jobs Creation Act, while at the same time balancing the needs of all involved. It’s a model that must be considered when moving forward.

Then again I’m….

Just some guy and a blog…..

When you look at the carrier market over the last 40 years (commercial handheld market) you will find that it was established under a limited geographic penetration plan — in short they started with what they could get. They didn’t start with an actual nationwide footprint with all encompassing spectrum. The carriers had inspirations to get to that point, but the return on their investment aligned naturally to target the population densities – they targeted the cash flow. FirstNet, this is a lesson to be learned!

Site acquisition became a big thing back then — still is actually. The concept of tower ownership has grown stagnate due to the fact that most of the coverage needed to build the commercial markets has been achieved, driven by demand as the carriers modeled their return on investment strategies. Growth is always a possibility, but unless we start creating another major NFL city, I’m afraid that most of the commercial sector has been built out, horizontally, covering all the major population zones – 42% of the landmass or 98% of the population.  Effectively, the carriers have equilibrium that best meets their Return On Investment (ROI). In actuality, we are starting to see the carrier’s shrink when it comes to owning their own infrastructure, i.e. AT&T Crown Castle sale. The consolidation into all IP technologies has eliminated the need for the traditional switched based networks, and is instead, focused on wireless data driven platforms, i.e. broadband LTE.

Another aspect of that consolidation was the result of converging wireless protocols. All the major carriers in the United States, and the world, are now adopting the LTE roadmap. Being that those very same carriers drive all of the telecommunications market space, it is inherent that they also drive the production of communications gear and services, i.e. VOIP, VoLTE, handsets, thus the issues with getting VoLTE for Public Safety as well as the manufacture of hardened handsets. Without the demand for such services, Public Safety will never be able to go against the tide, but, we are seeing changes in the VoLTE space, especially with the exponential growth associated with VOIP services, the alternative to traditional landline and cell service.

The Vertical growth pattern in the commercial carrier market is another story. Stacking the tower with multiple carriers is what turns the big profit for the tower ownership models, where as they see more and more of the little start-up wireless voice service companies taking hold. Essentially, these small companies have a demand for their own tower infrastructure, but on a much smaller scale than a carrier, or they actually ride the carrier’s infrastructure (that the carriers are moving away from) using what’s known as a Managed Virtual Private Network service, i.e. they buy bandwidth from AT&T, or Verizon, and in return have them manage their network for them so that they can just sell voice services. Companies like Straighttalk, Vonage and others, fall in this category.

For FirstNet the tower model will not work, unless a State, or the Feds, want to plow a bunch of taxpayer money into companies like Crown Castle, or American Tower, where as those companies can hardened their towers to meet the requirements of FirstNet. This is especially present if FirstNet does not fully develop the concept of the Public Private Partnership (P3) with the States. On the other hand, if they do fully implement a sound Public Private Partnership approach to this deployment, then the economic advantage to FirstNet, the States and the taxpayers will be tremendous; not to mention the commercial lending and private equity markets. This renders the need for cost justification to be moot, in that the private investors actually pay for the build, as well as the long-term management. What I am saying is that the State, and FirstNet, avoid the need of having the taxpayers pay the bill – that’s a pretty good deal if you ask me, and, it should be unavoidable. The State of Texas has instituted, into law, that any Public Private Partnership has to be considered when it’s to the benefit of the State, essentially making it a crime for anyone within the State Government that doesn’t consider the solution and fails to implement the P3 if it actually is better for the taxpayers and the State (ref Texas Public Private Partnership Statute – S.B. 1048 [Currently codified in the Texas Government Code – Chapters 2267 & 2268])

By adopting the P3 concept, most importantly the Myers Model™, the baseline for a sound structure of a business model can take hold. As with any successful P3, and the corner stone of the Myers Model™, is a balance of user, owner and investor requirements with their individual needs, this is what drives the implementation. The amount of work that FirstNet may envision as being necessary to build this nationwide network, may actually be must simpler, and less complex, than they have come to believe.

Along with the balance of needs comes the inherent ability to balance workloads for delivery. For example, FirstNet mustn’t worry itself with trying to develop a sound design for the network when the process of analyzing inventories, hardening requirements, and potential revenue streams, will generate the specifications required by all entities; this becomes the baseline design requirements for a statewide RFP, i.e. hardening, bandwidth and coverage requirements (not to mention service level agreements and the like). The State must complete the analysis and data collection assessments. They fundamentally have better access to information, as well as persuasive control of internal State agencies and users. In short, as it pertains to design, all FirstNet really needs to convey is the conceptual design characteristics, that must be met by each State, and then insure that such requirements are stated within the States soon to be advertised RFP, i.e. FirstNet demands the use of approved vendors, minimum hardening characteristics, coverage, bandwidth and minimum service level agreement frameworks.  Why over complicate the process? Therefore, how the State executes its own business model will be drafted per the terms of FirstNet’s relationship with the State’s P3.

The fruit of the State data collection and analysis will generate the design that is needed, which it should. The States bid will also encompass the requirements of FirstNet requests, and then advertised as a commercial investment and delivered via the Fund — Design, Build, Operate and Maintain (F-DBOM) bid method. Essentially, this generates the scope and specification requirements needed for a Private Equity investment team to consider in designing the State’s network. I can guarantee you that no private investment house will commit any cash to any opportunity without getting a very detailed design, to include the possibility of using existing assets as to cut costs in their investment, therefore, as you can probably ascertain yourself, FirstNet doesn’t need to create a detailed design.

All FirstNet needs to do is specify a high-level technical concept of requirements; outline available assets for potential use; and project a recurring revenue stream from the users of the network (Federal users, States will do their own). What would be nice, is to see a standard framework that all the States can expect to receive from FirstNet, so that they can collect, analyze, assess and convey the right amount of information for the RFP – it’s sole purpose is to attract investors to pay for the statewide build out using the P3 concept.  Why statewide, and why P3?

To me it is clear as day as to what the positive aspects of the P3 can do for the State, I will illustrated it in a simple statement:

What is the incentive for Private Equity to make the investment? This is quite simple as well — the spectrum is worth a lot of money! The Public Safety market has solid users that exhibit stalwart, long-term demand for broadband service that meets their own needs — that includes the need to respond to an emergency, i.e. SMART Grid, High Speed Rail, etc., such demand drives long-term based Service Level Agreements that generates a strong, and attractive, cash flow. Ultimately, this cash flow is what’s attractive to private equity investors, and can be compared to the carriers with their original, and standing, business model of selling handsets to all within their target population coverage in order to meet ROI. That’s about all that the two have in common. Private equity players are in it for the return on their investment.

When all parties have the same goal to build an all encompassing, hardened, broadband solution to meet their own needs, they will all share in the workload needed to execute. FirstNet just needs to insure that all the States stay on the same sheet of paper when doing so. As I have stated in the past, FirstNet doesn’t need to paint the pants on the ants for this one. This is the only way this national build out of Public Safety Broadband will be successful.

But then again I’m….

Just some guy and a blog….

“Perhaps the most important assumption in our models to date is the value of secondary use of our excess network capacity through covered leasing agreements. Focusing on and being successful in public-private arrangements to realize this value will be an important aspect in executing a sustainable business model.” (D’Agostino, Mar 2014)

OK, now that we have heard FirstNet state they will be using the Public Private Partnership model we can really start to focus on implementing the model. Man, trying to sell the Public Private Partnership Model was like trying to treat a bad case of gonorrhea – you go in standing up and you come out laying down moaning like a dog. Not that I have a personal knowledge of such an experience, but onetime I was in the hospital on Clark Air Force Base in the Philippines, I was in for a bruised kidney I received during a football game, but that young Airman that was in there with me, was all talkative until they rolled him into the surgery room. I’m convinced they torture those poor guys with the pain so they won’t play anymore where there not suppose to play. All I heard was a drill, like the ones in a Dentist office, then a whole lot of moaning from that Airman as they brought him out on a rollaway bed. I cringe just thinking about it.

Chairman Ginn threw me for a loop though. I thought I heard Chairman Ginn say “we are positioned now with a roadmap to get to a business plan”? This reminds me of land navigation exercises in the Army — a whole lot of guys roaming freely through the dense brush of Ft Benning trying to find a few locations on a map. Anyone who has done landnav courses understands you can’t survive without a compass, protractor and map. What I envisioned Chairman Ginn just said was that we just found our map and it says north is this way; we’re still looking for our compass and haven’t a clue as to what a protractor is. To add to the pressure the landnav exercise has been underway for two years now – visions of being a little late came to mind.

Me personally, I was always one of the first to get all the points… correctly. I loved landnav, and anyone that has done it knows that I must be very strange to state such a thing. I would run to get all my points completed, then shelter somewhere above the encampment before I would hand in my results. I did this so that I could get some shuteye or relaxation. Night maneuvers were even better, unless the instructors were carrying their night vision and/or thermal binoculars, but I digress.

It was a tremendous relief to hear GM D’Agostino convey “the roadmap” on the call. Finally FirstNet realizes that the model of execution has to be built using a Public Private Partnership model. A word of caution, don’t get caught up in the mindset that you have to please everyone right out of the gate when it comes to things like satellite, mobility and other business models. We need to concentrate on the build-out of LTE first and do so by focusing on the template of one business model, else you risk further confusion and non-alignment. Afterwards we can discuss the satellite, mobility and application necessities. Much easier to design around what you know you have in place by using a fixed template of a design (with a few modifications) and a limited target base.

As for your direct needs to gain knowledge on the implementation of the public private partnership scenarios, I have produced plenty of material to render a high-level concept of how these things work, but they are too extensive and complex to undertake without some type of training or certification. You don’t want to execute such a model without full knowledge; else you risk the financial and execution success of your state program. 

Public Private Partnership can be very successful, but they can also be very detrimental to the States, and FirstNet’s, financial stability if they are employed incorrectly. With that in mind I‘ve been working with a small group of entrepreneurs to build a training and certification process that will enable the education and training of consultants, or State employees, on the use of the Myers Model™. This newly formed company has a large University Advisory Panel that instructs on the use and implementation of such strategies. From there you can implement the model on your own, or you can also have this firm “consult to the consultants”, by engaging them to help your team in implementing the model statewide, or nationwide.  

Each State will have the same framework of executing the Myers Model™, but all of the projects will be modified to meet their own demands and user base.

If you want more info please let me know, but remember I’m….

Just some guy and a blog…

In a recent article by Donny Jackson of Urgent Communications entitled “Seybold: Many FirstNet contractors being selected by DOC/NTIA, not FirstNet management“, Mr. Jackson quoted Andy Seybold about the hiring process for FirstNet. If this is true could we be seeing a coup within the Administration to control FirstNet? Or maybe DOC and NTIA have some doubts about the investigation being done on the transparency and “conflicts of interest”? Or could it be that FirstNet is ill prepared to do the hiring process? Or Andy could have just rubbed someone the wrong way? All are valid viewpoints.

I’ve had the entire weekend to think about this claim. What would be the reason for the NTIA and DOC to make all the hiring decisions for FirstNet? I understand the logistics of the hiring process can be daunting, but we all know that any introduction of a hiring manager into the equation means his/her interpretation of what a good candidate is. Plus, the HR process needs direction as to what is needed, who fits the mold and how much value the candidate should bring.

As it pertains to the investigation I could see where the attorneys are nervous about what is being perceived. I can definitely see where FirstNet is not prepared to handle the HR process, but what keeps tugging at me is the notion of a chaotic progression that hides the actual desire to implement a decision process, where as the DOC can introduce their own picks to take over FirstNet, essentially controlling the HR process.

By doing so, the NTIA and the DOC, are actually picking the organizations team members who will ultimately drive the organization; thus allowing them the ability to control the message and the course of events. But, the DOC and the NTIA wouldn’t act alone, or at least not without an approval from above. The next above step is the Presidents Administration. With all that is going on in Russia and around the world, I would assume that the future of FirstNet has been put in the hands of a staff member, most likely an attorney, who is making all the decisions and thus instructing the DOC as to what needs to happen.  

What if… the DOC, who was mandated by the President to take charge, actually is in a takeover bid of FirstNet and is using the chaos of the accusations to cover their tracks? It only seems logical that the Administration would see the consternation from the industry as a sign that things aren’t going well, and that maybe a few bad decisions were made, thus the need to take it over. Killing them softly comes to mind.

Put yourself in the place of the Administration. Two years ago the President instructed the Department of Commerce (DOC) to allocate the spectrum to Public Safety; then instructed them to develop the National Public Safety Broadband Network; along with that instruction they allocated $7 Billion to fund their efforts.

To kick the process off the DOC then ordered the NTIA to create the FirstNet Board, to which they handpicked all the inaugural members.  Since doing so, two years has passed and nothing has been done to create the network. The lack of a business model to build the network, based on the requirements specified in the Jobs Creation Act, are not being addressed; the States are constantly highlighting the fact that no real direction is coming out of FirstNet; questions surrounding funding are being perceived as dubious, backed by claims of lack in transparency and conflicts of interest that only fuel the fire. If I were running the show, and I had a very important election cycle coming up, I’d be getting very nervous that this debacle could actually become the nail in the coffin for our political plans.

If the plan is to take over FirstNet, then why a quite coup? Why not just publically state that you are not pleased with the progress and have decided to go a different way? Why make it into a long drawn out process, which only helps foster the fire of alternative agendas and ultimately destroys credibility within the taxpayer base?

One thing is clear; I have been in the telecoms industry for 25+ years; I’ve never seen a network take this long to get started. In the commercial world your investors would have walked on you after twelve months of no activity – and that’s being conservative. I’ve seen investors walk on the first meeting. Without a business plan you can bet they would have never even sat at the table with you, but I’m….

Just some guy and a blog….

Update: LA-RICS has taken the path of “the same old” when it comes to deploying their large-scale LTE network. Is anyone keeping a log of what the ups-and-downs will be along the way? It’s going to be a bumpy ride. Personally, I see rough waters ahead, especially when it comes to funding the solution long-term. No matter how much they try to hide their difficulties, the fact of the matter, the only ones that will be harmed in this endeavor will be the taxpayers — and a few consultants and vendors. You can quote me on that, LA-RICS will be a burden on the taxpayer! My question to you, do you think the State of California will be able to come up with sufficient funding to deploy PSBN to the whole State? Without hitting the taxpayers pocket?

For the entire State deployment my estimates put that figure to be between $1.5 and $2 Billion dollars in a capital build program; at least, 3500+ sites (new sites like LA-RICS); and another $150 to $200 Million a year in operations and maintenance of the network. That is peanuts to what the network is actually worth and how much money it can generate annually. But has LA-RICS just blown it? I hope LA-RICS understands it’s going to cost them around $15-$20 Million a year to operate just in their county alone. I’m sure they included that in their figures, but who’s counting? Isn’t the State already $20 Billion in debt? Ahhh, what is debt anyway? Who cares just get it built and ignore the collapse of the State’s economy? We can at least say “we did our part for the Nations Public Safety Broadband Network and for the citizens of the State”. With the future collapse of the economy, I can assure you, the State will need that Public Safety Broadband Network. Here we thought the LA Riots were bad? Just in case you aren’t following me – I’m trying to be sarcastic.

If the approved Motorola bid was at $217 $175 Million, my math may be off, but that would have been $100 $65 Million more than the bid we would have submitted while at my last employer — a bid I lead. That doesn’t include the $380 Million contract Motorola won for the LMR network as well. If the Authority’s T&Cs would have been less stringent, and actually not biased towards Motorola, the County would have had a great bid that would have at least saved the taxpayers a $100 $65 Million. You can refer to my earlier article about the T&Cs ruining their chance of a safe and viable bidding process entitled “FirstNet: this is how LA-RICS will fail” as well as the article entitled “Vendor Negotiations for the LA-RICS LTE PSBN project — First, a history lesson of LA-RICS, from an observational point-of-view!”.

In reviewing my crystal ball, I can state, that the $217 $175 Million that Mr. Mallon just put together for the project, could have been completely funded by Private Equity, thus avoiding any bonds, grants, or entitlements from the taxpayers. But, LA-RICS is comfortable in spending taxpayer money, at a premium, for a vendor who doesn’t make a single piece of LTE gear. I have to say, Motorola did choose a great partner in Ericsson though — you can’t go wrong with their LTE product. But, the judges are still out on GD (General Dynamics) being the construction crew. I’m sure GD’s pricing will be quite pricey, I’m assuming all those airplanes and ships come with a lot of overhead; then again GD will just sub-out all the construction work anyway causing a lot of passthroughs. I wonder how much the Motorola and GD mark-ups are? By comparison to the bid I led, I can safely ascertain, at least $100 $65 Million worth of overheads. Only time will tell, the board has spoken (just like Oz), so onward and upward?

In the end, I really do wish the State of California the best in achieving what it needs to survive and to be successful in its implementation for FirstNet. I really do believe that Motorola will do its best to deliver you a great LTE network — their reputation is on the line for this one. I am praying that your management team will be guided down the path of least resistance in attempting to build a very complex LTE network. Just remember, if you start to realize that your plan isn’t working, when it comes to funding, you can call me anytime for assistance. I promise not to gloat.

Does this mean that California is “Opting Out” of FirstNet? It sure does sound like it. If LA-RICS is building the network themselves then, to me, that is a clear definition of “Opt Out”.

Just some guy and a blog….