If you can’t beat them join them.

Maybe, just maybe, I’m starting to see tones of a combined Opt-Out and Opt-In solution being considered by the NTIA. This is excellent news! By incorporating the Opt-Out and Opt-In solution into a combined approach is a very smart thing to do. Now States that decide to build out their own radio access network can obtain a template of a design consideration when implementing minimum standards for hardened sites, transport IP solutions, virtual network connections and cyber security related solutions. Most importantly, the State gets the opportunity to create its own solution of interoperability between adjoining States.

One important topic that needs to be considered – one that few people seem to understand – is the use of the revenue. If you read the NTIA, or FirstNet’s, interpretation of the law you will notice that they don’t go very deep into the topic of the revenue, other than “a State can’t use the revenue” and “all revenue the State makes has to be reinvested back into the network”.

First off, this would be an asinine effort to block the State from using the revenue; after all the network and the spectrum belongs to Public Safety, so why can’t they use their own revenue? Why can’t they capitalize on the use of the spectrum to improve things throughout the State and the Nation? Why must the revenue be restricted to just reinvesting into FirstNet and private investors? That makes no sense. That’s like opening up your own super market, but not letting anyone to collect revenue from sales.

Second, if you read the law it specifically states:

In short, when FirstNet says that a “State can’t use the revenue” this is in fact a lie, or at least misinterpretation of the law. Through a Public Private Partnership, and/or a lease agreement, the State can use the revenue generated off the use of the network.  I will give them the benefit of the doubt and say that what FirstNet is trying to convey is that the States that Opt-out, should not think if the network as an open spicket of revenue for the State. Now this seems to be the gallant thing to do, if you know there will be nefarious activities that will follow. But, how will FirstNet ever try to enforce such a rule? I can just see it now; FirstNet tells Texas they can’t use the D-Block spectrum anymore because funds are being used for building roads, thus Public Safety is hit with statewide outages causing chaos.

That’s looking at the glass half-empty. If you look at the glass half-full we should encourage the generation of revenue for the State, because the increase in revenue means more support for Public Safety, the economy and the market place. In fact, any share of revenue that the State acquires, through the use of its Public Private Partnership, should be prioritized and re-invested into Public Safety, but also be allowed to flow into other needy programs within the State, such as Healthcare, Schools, Transportation, the Elderly, etc.. Anybody that would deny such use of the revenue, isn’t understanding the complete outcome of what the network can produce.

You will also note that within the law it really doesn’t address the private side of the Public Private Partnership — it only addresses the State and FirstNet. The fact is that any primary investor that funds the Public Private Partnership will, in fact, obtain its own rights to equitable shares within the invested entity, thus equivalent in revenue distribution. In short, if anyone wants to invest their own money into a State Public Private Partnership to design, build, operate and maintain the State’s Public Safety Broadband Network, then they will be able to generate revenue off their equitable share of ownership. So I ask once again, why constrict the States revenue portions to just Public Safety and FirstNet? All you are doing is limiting your own self for no real reason at all.

You should note; anyone can invest into the State’s DBOM Public Private Partnership, and should be encouraged. Why? Because a statewide hardened infrastructure that supports all forms of connectivity should be open to all market participants, i.e. local, regional, national carriers, local utilities in the likes. Plus, it allows those same participants to save on owning the assets, increases their coverage, and thus revenue which can only improve the local economy with more investment and job creation statewide.

But whom am I other than….

Just some guy and a blog….

So let me get this straight – FirstNet is considering to do what it said it was going to do from the start? Give all the spectrum to AT&T or Verizon anyway? I mean, if I were Verizon, or AT&T, I would submit a bid for the FirstNet spectrum too. After all, where else can you avoid your spectrum caps and get some of the most valuable spectrum on the planet — for free — than from the Federal Government on the back of Public Safety and the taxpayers. Has anyone seen the revenue made from these carriers in the last year? AT&T alone has a market cap of $261 Billion with $162 Billion in revenue last year alone, so adding some more revenue to boot, without paying for the spectrum, or for a measly $6 Billion a year, is nothing, especially when they get to expand their capacity more than a hundred fold. Business wise, yah, if I were AT&T I would submit a bid as well. But, ethically is getting the spectrum for pennies on the dollar, on the backs of Public Safety and the taxpayers, the right thing to do? How would someone sleep at night knowing that they took advantage of, and conned, Public Safety and the taxpayers in the largest theft of spectrum on the planet?  

I guess “doing what’s right and not take advantage of others who know no better” is questionable and doesn’t hold any value today? We have politicians getting away with much worse. What would it matter for those same politicians to get their hands on some of the cash from FirstNet that will be coveted by the commercial carriers? Or is this just a bad deal for the States? Imagine if a State were to build its own Public Private entity to capitalize on the use of its own spectrum, with a relationship with those same carriers, but on their own terms? If FirstNet moves forward with a carrier based solution, all they are doing is screwing the States. It’s like a bad contractor taking advantage of an old Lady who can’t defend herself with a half exposed roof. The carriers will be glad to take your spectrum, for their own use, leaving you with a network only half built (or less) – unless you pay them some more money to complete it. Who in the end will have to pay for these bad decisions? Public Safety and the taxpayers, most importantly, the State taxpayers. Mark my words.

Through a State driven Public Private Partnership, a State can capitalize on the broadband services and revenue provided by Private Investment. Some of those investors could be the carriers themselves. Essentially, the State would incentivize the use of the spectrum to capitalize on a private entity to commission its much needed hardened infrastructure to support both wireline (fiber networks) and wireless broadband solutions (5G, etc.). This solution would enable the prioritization of First Responders, State agencies and entities over any commercial use of the network; while at the same time reaping the benefits of much needed revenue to help support Public Safety needs for the foreseeable future. This private entity within the State would hire locally, maintain locally, and increase incentives for private investment to come into the State’s economy – the FirstNet carrier solution will not do that. The FirstNet carrier solution will not even try to tackle building out to the rural areas of the State — which makes up more than 62% of the geographic landmass of the United States.

If FirstNet awards a carrier based solution, then FirstNet will have come full circle since its first days of pushing a carrier solution onto Public Safety. The carrier FirstNet solution only allows the carrier to increase its capacity 100 fold, across the entire United States, for their own benefit of increased profits all while paying a measly fee to FirstNet. What a waste of time, money, and resources. This is what could happen if we have the government trying to run a broadband solution.

But who am I other than…

Just some guy and a blog….

Just recently Hans Vestberg, CEO for Ericsson, stated:

By the time a State starts building its portion of FirstNet, we will be delivering 5G capacity to all the rural and metro areas. Rural areas make up 66% of all the landmass in the United States; 16% to wilderness; and 18% to metropolitan areas. Tests performed today demonstrate that during an emergency Public Safety utilizes less than 3% of a given geographic areas capacity. During normal operations Public Safety utilizes less than 1%. At 340X more capacity on 5G Public Safety won’t even be a blip on its own network – even during a disaster. That means a whole lot of available capacity to help fund Public Safety in a very big way. In fact, such capacity will become the cornerstone to building a solid infrastructure that can support entire economic engines.

Imagine having a network with a hardened fiber transport expanding throughout all territories; 5G wireless (Micro, Macro, Small Cell) with inclusive DAS; and solid backhaul of fiber and microwave that is inclusive of FTTx solutions; and all of this infrastructure that can support a States entire economy; diverse and protected; and expandable for future technologies. A network that will cover all the geography of a given State. A network that the carriers would love to lease space on to increase their own profits while at the same time expanding their coverage. A network where wireline and wireless options to the home are as common as delivering power or water – but only better. Imagine a network that can isolate traffic between a large private fiber network down to the single packet of an email message, all protected, impenetrable, and based on an infinite amount of transport capacity. This is entirely doable. All you need is the right balance within the business model to accommodate the solution.

I’ve said for a long time that you should avoid nay-sayers because they always have a problem for every solution. The fact is that developing a business model to accommodate this solution is very doable – and it’s not new. In the past all of the networks developed within the United States were based on a subscriber model of users buying phones, paying monthly access, and selling services. It’s easy to assume that this model has worked in the past, thus should be used when moving forward. But, that is not true. Those models of supporting large carrier solutions are not the model FirstNet needs in moving forward with. FirstNet has to rely upon a much wider base of users; all having disparate needs of what how they use broadband access; all having the fundamental need for broadband to power their operations and ideals. The only way you can reasonably assemble such a balance is through a partnership between governmental needs fostering commercial incentives to attract private investment – in short you need a Public Private Partnership. But…. there is something else you need to develop for such a solution – control.

By focusing on a Top-Down, nationalistic, or government administered approach you will lose control of all the variables associated with your deployment – and quickly. Each and every State is different in how they do things and what their needs are. It sounds really good to build the Corporate Headquarters first, then administer each geographical unit underneath – sounds very sensible. The problem is that even the national carriers did not start this way. They started from a small Mom and Pop solution that expanded as the demand increased. By constructing a solution from the top-down we are saying that we know what the future holds, so why mess around with building it based on demand and just go to the end and bypass all the pain and sweat. That solution will not work. You have to build it based on demand and you have to start small – thus the bottom-up approach encased in a State solution. In short, we build all the pieces and then put together the national puzzle. We can’t just say we a have a puzzle and then expect that all the pieces will just fit together on their own.

By focusing on the bottom-up solution both of the solutions for Opt-In, or Opt-Out, will work. The real difference will be that with the Opt-in you give all the control to FirstNet to try and run the solution for your State – and you will have to help pay for that effort. The Opt-Out solution enables the State to maintain its own control and relies on private investment to come in a pay for it – not the taxpayers. The physical build is the same for both solutions, but the modeling and the rollout based on demand will be drastically different.

The Opt-in solution will rely upon a partnership between a national carrier and a program team. The complexity of the team, and its balance between investment needs, will force a metro first expansion first, then opportunistically focusing on rural expansions. Why? Because the partners in the Opt-In solution are focused on their existing carrier model and the need to generate revenue based on that pre-existing model – especially if they have to make a $5 Billion payment to FirstNet every year for 25 years. Sounds like a lot right? What the carrier doesn’t tell you is that they will make 5 times that figure monthly. The only difference now, is that instead of them having to pay for the spectrum, then setup operations to sell service, FirstNet is offering the spectrum for pennies on the dollar and the use of their already existing infrastructure, thus increasing the margins substantially… and yes they will allow Public Safety priority, especially when they know that Public Safety uses less than 1% of the network capacity anyway. I can guarantee you that the Opt-in solution will still face the same issue that the carriers face today — expanding to the rural areas – if the demand is not there (and they will insure that the need is not there) – they will not build to those areas. Remember, they are beholden to the shareholder, not the taxpayer like FirstNet thinks.

The Opt-Out solution is focusing on the State’s ability to control its own destiny in a more controlled state. For the Opt-Out Public Private Partnership solution the State is one of those investors that the company is beholden too, thus the taxpayers. The newly created privatized broadband company can focus on selling all that capacity, at all layers of its network, while at the same time expanding its hardened infrastructure to insure the rural areas are the priority. Where a carrier is driven by the ARPU model (average rate per user) this new broadband entity will focus on a holistic approach to layering its customer base through fixed, monthly, and on demand service solutions to an expanded, and fixed, base of users covering all State and Federal agencies, private commercial entities, and the commercial taxpayer base. In this case, the network will allow those same carriers focusing on the Opt-In solution to expand its coverage area without spending any money on capex to build, while at the same time not being responsible for the spectrum allocated to Public Safety.

In the end, the Opt-Out is more manageable; more focused on local needs; yet still delivers what the national solution wants.

But what do I know I’m…

Just some guy and a blog….

Respondent:

Dr. Michael Myers

Dr.Myers@me.com

The following document outlines response questions pertaining to the SAPP; how it pertains to HR3630 “The Middle Class Tax Relief and Jobs Creation Act of 2012”; and the deployment of the Nation’s Public Safety Broadband Network.

In summation, this document outlines the interaction needed for States that elect to “Opt-Out” from the “FirstNet” plan. This document provides a context and alignment between necessary next steps and actions that will be required by the State in providing its alternative solution for a statewide Public Safety Broadband Network (SPSBN). Overall the document is relevant with some baseline observations and recommendations.

The context of this response is to help and improve on the FCC (Federal Communications Commission), the NTIA (National Telecommunications and Information Administration), the “FirstNet” organizational development, and a State’s ability to execute a cooperative arrangement for deploying the Nationwide Public Safety Broadband Network (NPSBN).

Response 1 – Overall the context and the ambience of the message being delivered seems to be that of a “this party will do what it will do and that party will do what it wants to do”. I believe the underlying message should be one of a cooperative framework. This document reflects more of a “requirement” rather than a “entreaty”. In the end all parties, e.g. FirstNet, Opt-Out State, Opt-In State and Public Safety, are driven for the same cause of constructing the NPSBN. The only contextual difference in who builds the solution is almost moot. With that said, it is recommended that the NTIA and DOC establish FirstNet as a unifier in developing the technical solution that can accommodate both the Opt-In and the Opt-Out solution, not an Opt-In only scenario.

For the benefit of time and cost associated with legal interpretations I would suggest a third party review process of all State Opt-Out solutions.

In reviewing this statement, you will notice that there are no “RAN-specific network policies established by “FirstNet””. Therefore, this statement is moot. It is recommended that all technical “RAN-specific policies” be administered by the assigned Technical Advisory Board listed in the Act.

Overall the First Responder Network Authority, and its acting agent the “FirstNet” organization, must construct templates for governance, deployment, and technical adherence so that States can have requirements laid out prior to their design considerations in any State Opt-Out solution. This will help the State, and FirstNet, in forming a baseline for requirements needed when advertising their own Design, Build, Operate and Maintain (DBOM) Request for Proposals. The State gets the specs it needs to put in its RFP; FirstNet gets to have some form of standardization across all solutions with the ability to establish a framework of requirements that all States can use, or modify, to meet their own specific solutions. Most of the differences within each State Opt-Out solution will be driven by its ownership model and revenue distribution with its “partner”. It can be assumed that the State will be satisfied if the technical requirements that FirstNet would suggest to them. Doing so will enable the State to cut-n-paste them into their own individual RFPs.

It is further recommended that FirstNet come up with a template for Governance and baseline services for revenue operations, e.g. framework for the organization of a commercial entity and the preliminary service offerings. This is not a FirstNet vs. the State effort. The State wants FirstNet to setup its basic technical and interoperable requirements so that the burden does not fall upon the State. If FirstNet does not establish a framework for such actions then the risk of divergent solutions will be high, thus risking the success of the overall and holistic goal of all parties.

Being that the established law does not clearly define “FirstNet the organization”, trying to acquire any type of lease arrangement for use of the spectrum will be a tough battle to fight. To avoid such entanglements, it is recommended that FirstNet become part of the State minority ownership team. Given that all the State Opt-Out solutions will most likely fall into a State driven “Public Private Partnership” (P3), it is recommended that FirstNet outline its role in a State’s Opt-Out Public Private Partnership by taking a minority stake in each of the State’s P3 solutions, thus insuring itself revenue for the long-term support of the overall nationwide solution. As outlined in the law, any revenue that FirstNet generates from such partnerships will be fully compliant with reinvestment necessities to fulfill self-sustainment and self-funding needs. With a FirstNet ownership stake in each State P3, FirstNet will fulfill its obligations to the law, avoid legal hurdles, and foster better relationships between the States and FirstNet. The only objections to this solution would create an unnecessary losing position forced upon Public Safety, the American Economy, and its taxpayers, thus defeating the sole purpose of building the Public Safety Broadband Network.

Signed:

Dr. Michael Myers

We are finally seeing FirstNet make an effort to address Opt-Out States — but through the NTIA and FCC. I have this vision of a brat whining to the school teacher because others won’t play with him on the playground. 

Although, this matrix will most likely only outline technical features (addressed only to the FCC/NTIA), for the benefit of doubt lets say FirstNet is making an effort to address Opt-Out States. Addressing the technical aspects of the network will not be that complex to administer — no matter how complicated FirstNet makes it seem — that’s because we only have 3-4 real providers of the technology, all of which already interface with each other. The real issue will be how FirstNet lays out its operational controls and governance.

It doesn’t matter what FirstNet believes on how the network should operate, because being a State based Opt-Out solution, the State will be in charge of its own operational plan and governance control. FirstNet trying to impose a fixed structure of operational control over State based assets will not fly. Let alone the Tenth Amendment, the real issues will be driven by revenue controls and provisioning of new groups. The complication comes from the billing engines and the provision of services to the initial handset solutions assigned to specific groups. Technically it can seem to be overwhelming, but the carriers do it every day with 100’s of Millions of users every minute of the day. The real issue will be financial and operational control; who gets to provision new users; who gets to control the revenue flow from the users; who gets to control the user groups geographically, statewide and nationally – these are the real issues — not what interface I have to use to connect two fibers.  It will be interesting to see what FirstNet thinks in regards to how this will be run.

Even though FirstNet is creating this matrix, it really doesn’t mean anything outside of the fact that the NTIA/FCC need something to work with. As I spoke about in an earlier postingabout trust, FirstNet does not hold a lot of trust, primarily due to the fact that creating this matrix is the first real effort FirstNet has made in addressing the States that will Opt-Out. This gesture may be construed as FirstNet just appealing to the demands of the FCC who is, most likely, being inundated with State Representatives peppering them with what the “technical” and “interoperable” standards will be for an Opt-Out State. This is what I mean about building trust. Being forthright with what the FirstNet business plan is, or what FirstNet has been thinking in that regard, is the only real way to build the trust. If there is any hint of people within the FirstNet organization not playing by this open game, and fostering the States own solution, then they should find a new job.  

We’re coming upon a half Billion dollars being spent on FirstNet so far trying to construct a “new carrier operation” from the top down. How much more money needs to be spent before FirstNet understands their position as an oversight of Opt-Out States, thus applying their “technical matrix” through the FCC? Sure, FirstNet needs to act like a business owner for those States that will Opt-In, but, I can assure you that adjusting a business model to address such a solution will, or needs to be, driven from the bottom up and will be drastically smaller of an effort than what FirstNet is spending the money on today.

As with any government driven solution, we have to pay the folly-payment first, then the work really gets started. Along for the ride are those States that are “waiting to hear what FirstNet has before moving forward”. I can professionally state that there are a lot of States talking Opt-Out (and I have met with all of them), especially after the façade of “Opt-In and we pay for it all” has worn off. Reality has settled in – and I think FirstNet has come to realize this as well – States need to start sharing efforts to mobilize around a consistent Public Private Partnership model that can be replicated across borders to insure operational and governance controls that are easily understood and setup between adjoining multiple States. FirstNet is not going to provide you a framework of a Public Private Partnership model if it keeps playing the “top-down” card — Why? Because they won’t let go of preconceived ideas of how the network needs to be built. The answer to the whole PSBN lays within each State. The State is not going to get the answers it needs from a technically driven “interoperability compliance matrix” created for the FCC and NTIA. Remember, FirstNet doesn’t want the Opt-Out State to succeed — they want their plan to succeed — that plan is a government administered plan, not a State driven plan.  

Probably the biggest market economic boost in the last 10 years is being held up and the only people who are suffering are those in life-threatening situations; people that need jobs; the middle class that needs tax breaks; and the State’s ability to drive energy into its local economy.  Why? Because someone believes they may lose out on some “Free” money from the Federal Government, which is asinine. Just taking money from one pocket and moving it into the other. Fostering the Public Safety Broadband Network into existence, through the Public Private Partnership model I’ve been preaching about, will create thousands of jobs locally, provide a solid infrastructure to support communications in-whole, all while prioritizing Public Safety first over everything else….and fortunately…the modified FirstNet mission will rise with the tide.

But who am I other than….

Just some guy and a blog….

Just some guy and a blog….

Calculating the State’s portion of the build out of FirstNet and the Nationwide Public Safety Broadband Network.

Had an interesting conversation with someone and I thought I would write about it. In the Middle Class Tax Relief and Jobs Creation Act of 2012 that allocated the D-Block spectrum to Public Safety and created FirstNet, it is written:

(e) STATE NETWORK.—
(1) NOTICE.—Upon the completion of the request for proposal process conducted by the First Responder Network Authority for the construction, operation, maintenance, and improvement of the nationwide public safety broadband network, the First Responder Network Authority shall provide to the Governor of each State, or his designee—

Now lets get back to the meat of the question. 

If a State decides to “Opt-In” then item “C” above takes effect, that is “the funding level for the State as determined by the NTIA”. Essentially, what this says is that the “State taxpayers” will have to pay a portion of the networks build-out. The answer we get back from FirstNet is, “we don’t know what that amount is yet, because we don’t have our partner lined up. Once we get our partner lined up we can then do a design that will provide us a cost for each State”. (TJ Kennedy, President FirstNet) Well, this is not entirely true! I can guarantee you that FirstNet is not being fully transparent here. They know in great detail what the capital costs are looking like because they did a rough design a longtime ago. Doing a design is the easy part. Any reputable telecom firm can create a design with calculated costs within a few hours — as a matter of fact any reputable telecom firm will not even go beyond the go-nogo stage without a rough order of magnitude created — those same “reputable firms” have been working with FirstNet since day-1 I can assure you.  

State contributes $600 Million — and CANNOT collect revenue

How does a State pay nothing? With a State commissioned Public Private Partnership (P3) the State will choose its own partners, primarily financial investors (P3 consortium), and offer them the full rights to designing, building, operating and maintaining the State’s Public Safety Broadband Network. In short, the State brings the rights-of-way, assets, and – most importantly – the spectrum. The State sets the requirements of interoperability and technical standard requirements (per the PSCR and the NPSTC). State maintains a shareholder position, and board spot, to insure program goes as planned.

Private investing partners will bring in the cash to fund a start-up broadband company for the State. The P3 consortium will partner with a builder and manufacturer of the technology to build out the network. The State sets the contract terms for a 20 to 30-year obligation with full takeover rights if anything goes wrong. The consortium creates the new broadband entities Board of Directors based on shareholder positions. 

Revenue can be utilized through the P3 arrangement. (See below)

But whom am I other than….

Just some guy and a blog…..