FirstNet Releases RFP; Ball is in Wireless Industry’s Court

January 21, 2016

By J. Sharpe Smith

January 22, 2016 — Last week the First Responder Network Authority (FirstNet) released its final Request for Proposal (RFP), which establishes a public-private partnership to build, operate and maintain a standards-based LTE Nationwide Public Safety Broadband Network (NPSBN). Among other things, the RFP includes a national acquisition approach to building and operating the NPSBN.

Gomez

FirstNet adopted an objectives-based approach in the RFP, rather than a traditional requirements-driven model. The RFP contains 16 objectives, including deployment and provisioning of a nationwide core network and radio access network, backhaul, aggregation, national transport networks and operation centers, apps, and a device ecosystem.

“Normally RFPs signal exactly what they are looking for,” Anna Gomez, partner Wiley Rein, said. “This RFP gives the bidders the flexibility to tell FirstNet how they would build out the network to meet those objectives. Additionally, the bids will hang on the ability to use infrastructure that the bidders already have, because the $6.5 billion FirstNet has to invest in the network is not nearly enough money to deploy a nationwide network.

FirstNet has a number of tools to make up for that budget shortfall. One of which is the use of 20 megahertz of vastly underutilized spectrum. In exchange for building out the network and annual payments totaling at least $5.6 billion over 25 years, FirstNet will allow the winner to use the excess capacity in the network, and collect payments from the public safety agencies.

“The spectrum has to be worth it for the bidder, minus the $6.5 billion, to build out the nationwide broadband wireless network,” Gomez said.

Proposals to the RFP are due April 29, and now the question is who will bid for FirstNet. No one entity can cover all 50 states and five territories, so there will be partnerships and commercial agreements to fill out the primary bid. AT&T has stated it plans to bid, and Rivada was very active in the FirstNet proceeding. Black & Veatch has been involved in helping states plan for FirstNet. Gomez believes there will be a play for smaller and rural companies as part of the coalitions.

“FirstNet will look at small business, and rural contracting as part of its review. There will be opportunities and incentives for regional and rural companies,” Gomez said. “Parties need to be talking to each other now. Look at the likely bidders. Talk to carriers, aggregators, tower companies and spectrum arbitragers about how you might participate.”

One of the complications of the RFP is that any state can opt out, which would lower the buildout cost and reduce the benefit of the spectrum and potentially delay the bidding process. So, instead of waiting the states to make their decisions, FirstNet required bidders to break down their bid state by state, in terms of costs and revenues.

“FirstNet will reduce reduce both costs and revenues from the winning bid, if a state opts out,” Gomez said. “That enables FirstNet to have a more accelerated awards schedule than I initially thought could be possible. I thought they would not be able to award until sometime in 2017 and instead FirstNet has announced a November 1, 2016, award date.”

Once there is a winning bid, FirstNet will go state by state to explain how the network would be deployed and how much money would be spent in the state, which will then have 90 days to make its decision to opt out.

“This way the state can make an informed decision on the benefits of opting into FirstNet and compare that with the cost of building out the network on their own,” Gomez said. “The state can’t opt out and not do anything. They are obligated to have an alternative plan for deployment of the public safety broadband network.”