In the last week alone I have read a whole lot of articles on the State’s ability to Opt-Out, which leads me to my most recent diatribe. The most interesting article was entitled “State Officials Complain that Rivada Urging States to Opt Out”, which was confusing in one aspect. I couldn’t discern as to how “Rivada” was encouraging them to “Opt-Out” — even though that is the right answer – the States have been looking at “Opt-Out” ever since the law first was enacted. I seem to remember lots of discussion around the term “Opt-Out”, which is stated in section 6203 of the Middle Class Tax Relief and Jobs Creation Act of 2012. If anyone is to blame for the States talking about a real “Opt-Out” it would be me. After all, I alone, was the one spewing all these “fact-less” articles and troublesome “face-to-face” meetings with the States, their Staff, SWICs and their committees, local governing boards, investors and contractors. I take pride in my lone voice of dissent. But, I defer any blame to anyone else if that blame would cause me any pain.

Now that the cat is out of the bag, it has become evident that someone has moved the FirstNet cheese. There seems to be those hardened individuals that are trying to form dissenting ranks within the Public Safety Community, of which has drank the cool-aid that a federal solution is the only solution for FirstNet. In fact, that statement is true. FirstNet was created by a federal entity, is run under a federal entity, and is controlled by a federal board enacting federal acquisition rules. If it talks like a duck and quakes like a duck…well…  As with most political controversies these days it comes down to the 10^th Amendment and ideology.

Does FirstNet, as a federal organization, have any say in what a State does? Do you, the individual, believe that the “top-down” centralized federal solution is the right way of doing business for all Americans? Or do you believe that the solution is best delivered from the bottom-up under the control of the States and oversight provided by the feds? I’m not one for pushing politics – I just work in the broadband industry – but the decision, to me, lays within the confines of just getting something done, done right, on-time, and within budget, all while besting the revenue capabilities of the solution we are working on, which in this case leads me to believe that we have way too much bullshit and not enough framework to hold it.

So lets gets this straight, FirstNet comes in to build the solution for the State, what could possibly go wrong with that? Well, lets look at just the tip of the ice-berg. First off, lets say you go with the FirstNet “Opt-In” scenario, what exactly does that roadshow come with?

Your first obstacle to face as a Governor will be a long-wait time – unless you are the first State on the list — if it takes 24 months to complete a statewide (clean) build-out of broadband LTE (RAN), microwave and fiber backhaul connectivity, and the applications introduction stage, and you are State number 25 on the list of States, this means you would have to wait 50 years if they are doing one State at a time. Don’t know about you, but I don’t think I will be around that long, unless they come up with some revolutionized way to extend my life I will probably be dead. But, let’s be more realistic and say we deploy the solution for 5 States simultaneously (which is really complex to do even for a mature broadband deployment company like AT&T) that would mean you would get a start date 10-years from now. God be with those that are 49 and 50 on the list. What if we are visited by aliens within the next 10 years – and I don’t mean the guys from the South – and the aliens share some wildly popular mind control function that allows us to communicate without any infrastructure? Do we still have to deploy LTE in 10 or 50 years? Will it be interoperable?

Let’s say its 20 years from now, and you are the last State or Territory to get your network started as an “Opt-In”; your State will still have to partake in the solution anyway because it will be all State local contractors who will be called upon to build it anyway, why? Because they are “local”. Even the largest Program Manager or EPC in the world will tell you they actually don’t build anything, especially the carriers themselves, it’s the locals that do all the work. But, hey you don’t have to worry about any local contractors doing business in your State do you?

If anyone has ever dealt with a large-scale telecom build-out, they will tell you that the most time consuming and asinine part of the entire deployment of broadband is the environmental and local ordinances controlled by local boards. If you have ever sat in front of a local zoning board and tried to sway a panel of 7-14 board members on why they need a 70” monopole tower, hardened like Fort Knox, in the middle of a residential zone, you will understand that there are just some things in life you would be better suited for, like getting your teeth pulled, or having your skin peeled with a rusty razor blade while soaking your skin with alcohol. State local environmental and site acquisition teams will have to be contracted, thus refer to the previous paragraph and the statement “you don’t have to worry about any local contractors doing business in your State do you?”

Unless FirstNet, or the Program Manager, has some hold on doing local environmental, site acquisition, and zoning roadshow, this is a State thing that has to be dealt with. Take it from experience, you could write a book based on the views of local representatives and their belief that the cosmic rays interfering with their community’s libido is coming from the radiation off that new tower.  Then again, maybe you do want FirstNet to handle it! In the end the delays and the personalities is not a well suited thing, especially, for a Federal entity like FirstNet, or their representing Program Manager.

Which brings up the term “Program Manager”. The Program Manager will be the team that is awarded the FirstNet “Opt-In” solution (from their recent RFP). Instead of the State controlling its own course, it will now be faced with a third party “Program Manager”; who was handpicked and awarded the FirstNet contract with no say from the State? And you have to rely upon this Program Manager to be your face to the State Voters? I don’t know about you, but that would seem to be a little bit of a risk for anyone’s political career. What happens if that Program Manager happens to be AT&T, Verizon, or any carrier, and the service you get from them today is minimal, if not down right crappy? How are you going to convince your voters that the carrier solution is best for them and that you know what you are doing?

In the end, you can count on the fact that you WILL get all the Federal Agency “support” from the Department of Commerce, and the NTIA, even if you didn’t ask for it. Anyone heard of “Obamacare”, or “the Affordable Care Act”? That went well didn’t it? Government has its place, like constructing interstate highways.  Well no, the highway infrastructure has been decaying for years and crumbling in disrepair. What about water infrastructure? Well no again, anybody heard about Michigan and its water problems? Okay, how about our toilet water? Try again, how many people do you know that are fed up with cleaning a 1.5 gallon toilet? For all these issues, who was left holding the bag and spent their own cash to fund the cleanups? The State and their taxpaying voters that’s who.

The least concerning “top of the iceberg” issue will be that someone will still have to physically build and fund the statewide broadband RAN and fiber infrastructure…. supposedly paid for by FirstNet with a measly $6.75 Billion when we know the overall program will cost over $100 Billion. If you have been following the FCC’s Net Neutrality, Title II Reclassification of the Telecommunications Act of 1934, or the American Broadband Act, over the last few years you would have heard about the cost overruns, delays, and under performance of broadband solution being deployed and utilized by the American people. You should note, that the same Federal Government who relied so heavily on the commercial carriers to build out the Broadband America infrastructure, with federally subsidized taxpayer grants, you will undoubtedly recognize that there is a great big lessons learned hear.  

The lesson is: if you are counting on the Federal Government to come into your State and build you a “local” First Responder Network – you will be drastically disappointed. It’s not without a valiant effort that the Federal Government believes it needs to, it must, build the entire Public Safety Broadband Network for the States. But, at some point we need to stop the “man” from slapping us in the face when we ask for help. Let’s be realistic and refocus on a smaller approach, one that still incorporates the standards and technologies approved by FirstNet, but is designed, built, operated, maintained locally and controlled by the State…like everything else the Federal Government flops to succeed when trying to deploy a solution that touches all of America — the State gets left holding the bag. Will the Federal mindset ever be understood that it is most effective when dealing with just the leadership of its member States and that the State – because it controls locally – is best suited to be held responsible for the actual work?

In the end though, who in their right mind really believes that the Federal Government will want to fund this themselves? I can guarantee you that the State taxpayers will be called upon even if the Middle Class Tax Relief and Jobs Creation Act of 2012 mandates a “self-funded” solution. The FirstNet solution is a Federal Acquisition Required program, which means its NOT the “self funded” and “self sustaining” solution that was demanded by Congress and enacted into law. FirstNet is a federally mandated Indefinite Quantities (IDIQ) contract, that’s all. It’s a goal that contradicts everything about the Middles Class Tax Relief and Jobs Creation Act of 2012.

So ask yourself…if you really want to put all your money down on the federal solution for the States to “Opt-In”, you may lose a little money. Even with the federal solution, I will still be right, and so would Rivada, the Opt-Out is the only REAL solution for the Nationwide Public Safety Broadband Network…even after the top-down solution fails.

But who am I other than ….

Just some guy and a blog…….   

I know a few of you have seen this diagram floating around the circuit (see below). Have you noticed anything wrong with it? Have you noticed a shift in strategy?

 

If you analyze the two red circled areas, you will see what I’m talking about.

The first area is the application for a grant from the NTIA, not FirstNet. You also have an application to lease the spectrum – “FirstNet spectrum” – from the NTIA as well. FirstNet, or the First Responder Network Authority, is not the NTIA and they don’t own the spectrum. The FCC controls the spectrum and it is allocated to Public Safety. These are bogus requirements. FirstNet the organization, really has no say in what an Opt-Out State does. The only party that the Opt-Out State works with is the NTIA.

The second area is that the “State must pay user fees to FirstNet” – this also not true. If you are an “Opt-In” State, then yes you have to pay FirstNet a fee for the service they will run for you. But, if you are an Opt-Out State then all you have to do is apply for the $135 Million grant NTIA and the access to the spectrum from the FCC.  

In actuality, the law is broken into sections. Sections 6204-6212 only address the creation of FirstNet; what it is authorized to do; and what it can perform in the way of creating a national solution for Public Safety Broadband. These sections do not address the States that “Opt-Out” – it only addresses the “Opt-In” States. Section 6302 is the only section that specifically addresses the State “Opt-Out” scenario and does not address FirstNet, thus creating a separation of objectives.

The diagram above tries to illustrate that a State that Opts-Out has to pay a fee to FirstNet, which is not true. Only the Opt-In States pay a fee for the FirstNet service. An Opt-Out State does not pay for service from FirstNet because it is creating its own Public Private Partnership solution that establishes it owns service. The only fee that an Opt-Out State will be faced with, note that I did not say pay for, is the connection to the FirstNet Core Network. The reason I do not state “pay for” is because the shoe will be on the other foot. The State may charge FirstNet to get access to its network that it deployed using its own funding mechanism, thus the “FirstNet fee” may be moot by the charge for FirstNet to access the State network at the local level…or at least negated.

The State that Opt-Outs is in fact creating its own Broadband entity, much like FirstNet is doing on the national level. In essence, the two are competing with each other.  A bigger threat to FirstNet will be those States that choose to work in regions with combine connectivity agreements through adjoining States, this will definitely start to take away the majority share of the network from FirstNet – and quickly – especially as it relates to operating the Cores. If this is indeed the case, then FirstNet will be just left in an oversight mode and forced to manage the standardization and interoperability process — only.

In the end this diagram is wrong and should not be followed. The nationwide effort to build the Public Safety Broadband Network from the top-down will not work and will not meet the “self sustainment” and “self funding” goals required by the law. FirstNet needs to start working with the States to garner a stake in ownership of the State P3’s….good luck with that.

But who am I other than….

Just some guy and a blog….

Just sat through the webinar for the Pre-Proposal Conference hosted by FirstNet. Did you ever see a kid that was about to make a huge mistake? Any parent will tell you that you are faced with the dilemma of whether or not to let him fail so he can learn; or grab him before he falls so you can guide him down the right course.

No one really wants to submit, or spend the time to submit, without understanding the ownership hierarchy. Will the primary direction come from the federal government and the acquisition role? Or will a newly created entity report to a private entity and its shareholders? How will I get my return on investment and who is in control of that process of the returns?

I really like what the CEO Mike Poth is asking for when it comes to the vision statement for FirstNet, unfortunately, I think he is on another planet of higher thinking when it comes to what is actually being executed. First we hear the glorious speech where Mr Poth talks about FirstNet wanting a public private partnership that meets all the demands and lets free the use of the spectrum for the private market place. Ten minutes later you hear Ms Calahan tell us its a Federal Acquisition process and you will be struck by lightning if you step out of bounds of the procurement process. Seems as though there is still a struggle between delivering FirstNet as a private entity versus a federal agency. Until this gets answered the risk factor is out of this world, especially for a private investor. 

Searching the background of Ms Calahan you can easily discern that she reports to the Department of Commerce and Mr Poth reports to an “independent governing agency” — FirstNet. How do you let the creative solutions flow, especially for a P3, when you don’t know where, or who, you should be taking direction from? Why would a private entity want to sign-up to, and fund, a “independent governing agency” if it still reports to the Federal Government? That private entity will tell you to make the taxpayers fund it. I spent 10-years in Military Intelligence and everyone knew MI was real-time oxymoron – but this one takes the cake.

The vision I have is the Federal Government dressing up in sheep’s clothing and inviting the sheep into to eat using sweet talk about a Public Private Partnership. Until the real beast rears its head, all FirstNet will get is a typical IDIQ contract under FAR requirements, which means all its plan for a real “public private partnership” will go down the drain. I would be surprised if FirstNet will even get a Joint Venture out of this. Unfortunately, they are too far down the road to alter course now…and that course is going to be a disaster for the Federal Government… again. Unless, FirstNet grows a pair and takes charge of its own future. We can’t have a federal organization like the Department of Commerce overriding the original plan for FirstNet to be a “separate and distinct governing agency”. If FirstNet wants to see any hint of success, it has to establish itself as a private entity and partner with private investment to make the Public Safety Broadband a reality.

The current path for Poth will be a tough one.  🙂  But, we have an election cycle coming up and there is a lot of talk about downsizing the federal government. What better the opportunity than an organization like FirstNet, who hasn’t gotten off the ground yet, to declare itself a private entity with Public Safety being one of its primary stakeholders. Forget about the federal government side, FirstNet should solicit a commercial P3 RFP, much like Mexico just did, to solicit private equity ownership in creating a private entity to monetize the 20Mhz of spectrum. Heck even the New Hampshire “Opt Out” P3 RFP is better than what this is turning out to be. The FAR process, and the oversight of the government, is going to ruin this whole deal. Mark my words, if this proceeds in this manner it will be a disaster. Then again, if I were someone that didn’t want this whole thing to succeed, this would be the perfect way to do it. What better way than to introduce complexities of the federal procurement process onto an “independent governing body” to further cloud their approach to success. I think the term is “divide and conquer”, but who am I to know. I’m sorry, but the DOC is the exact opposite of what FirstNet needs.

How do we know there is strife between the ranks of FirstNet and the DOC? Ms Calahan said it best, “they (FirstNet Leadership) keep saying the word “partner”, but I see everyone as a contractor”. Meaning, Ms Calahan represents the Federal Procurement Process and ultimately she is the one in control and reports to the Department of Commerce…not FirstNet. Why all the confusion? If FirstNet wants a federal solution, then just put out a typical IDIQ framework to the market place. Or put out an RFP asking for a Joint Venture. Any reason why they can’t? Well, because the law states the need to be “self sustaining” and “self funded”; a law that a federal agency like DOC has never operated under before yet must follow. I believe the leadership of FirstNet understands this and really wants to go the private route, but they are constantly asking the federal government for help – they are looking in the wrong place for help.  Why else would we even be talking about an IDIQ if it weren’t the chosen model of the federal government – they do everything as an IDIQ. Do what the law describes and act like a “separate governing entity” – in essence be that private entrepreneur and start searching for your investors to pay for your proposed solution – like any private company has to do.  The law already stated that the federal government was not going to give you any cash, so go look elsewhere for the cash you need – private industry!

FirstNet really needs to read the Mexico RFP (or the New Hampshire RFP). The Mexico RFP is being processed exactly how FirstNet needs to act. If FirstNet needs cash to DBOM their solution, then put the RFP out to the right market – the Private Equity market. Why must we shotgun blast an RFP to the open market that only creates more questions than answers. Your market is your funding partners, not technology, not the government, and not an industry specific vertical. I say again…”your market is the Private Equity market!” The context of the the FirstNet RFP being a “objectives based RFP” is the right course – now you just need to sell it to the right people.

PS… it will also help if you know what your talking about when it comes to “Public Private Partnerships” – who do you think is best positioned to know all about P3s — other than myself? Have you looked at the major EPCs yet? They do a lot of P3s in the vertical industries of transportation, infrastructure and power markets; they also do a lot of work with major Private Equity partners. Did you know that most States are already adopting the P3 framework as part of the State legislation? That’s a hint.

But whom am I other than…..

Just some guy and a blog….